Correlation Between Telkom Indonesia and ESGEN Acquisition
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and ESGEN Acquisition 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 ESGEN Acquisition 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 ESGEN Acquisition, you can compare the effects of market volatilities on Telkom Indonesia and ESGEN Acquisition 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 ESGEN Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and ESGEN Acquisition.
Diversification Opportunities for Telkom Indonesia and ESGEN Acquisition
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and ESGEN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and ESGEN Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGEN Acquisition 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 ESGEN Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGEN Acquisition has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and ESGEN Acquisition go up and down completely randomly.
Pair Corralation between Telkom Indonesia and ESGEN Acquisition
If you would invest 11.00 in ESGEN Acquisition on August 30, 2024 and sell it today you would earn a total of 0.00 from holding ESGEN Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 2.27% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. ESGEN Acquisition
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| ESGEN Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and ESGEN Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and ESGEN Acquisition
The main advantage of trading using opposite Telkom Indonesia and ESGEN Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, ESGEN Acquisition 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 ESGEN Acquisition will offset losses from the drop in ESGEN Acquisition's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Charter Communications | Telkom Indonesia vs. Vodafone Group PLC |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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