Correlation Between Telkom Indonesia and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Eagle Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Telkom Indonesia and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telkom Indonesia Tbk and Eagle Financial Services, you can compare the effects of market volatilities on Telkom Indonesia and Eagle Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Telkom Indonesia with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Eagle Financial.
Diversification Opportunities for Telkom Indonesia and Eagle Financial
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Eagle is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services and Telkom Indonesia is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Telkom Indonesia Tbk are associated (or correlated) with Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Eagle Financial go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Eagle Financial
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Eagle Financial. In addition to that, Telkom Indonesia is 1.13 times more volatile than Eagle Financial Services. It trades about -0.09 of its total potential returns per unit of risk. Eagle Financial Services is currently generating about 0.09 per unit of volatility. If you would invest 2,914 in Eagle Financial Services on September 1, 2024 and sell it today you would earn a total of 636.00 from holding Eagle Financial Services or generate 21.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.83% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Eagle Financial Services
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Eagle Financial Services |
Telkom Indonesia and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Eagle Financial
The main advantage of trading using opposite Telkom Indonesia and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Eagle Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eagle Financial will offset losses from the drop in Eagle Financial's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Charter Communications |
| Eagle Financial vs. Chesapeake Finl Shs | Eagle Financial vs. Taylor Calvin B | Eagle Financial vs. PSB Holdings | Eagle Financial vs. Farmers Merchants Bancorp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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