Correlation Between Telkom Indonesia and Fraser
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Fraser 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 Fraser 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 Fraser and Neave, you can compare the effects of market volatilities on Telkom Indonesia and Fraser 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 Fraser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Fraser.
Diversification Opportunities for Telkom Indonesia and Fraser
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Fraser is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Fraser and Neave in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fraser and Neave 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 Fraser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fraser and Neave has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Fraser go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Fraser
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Fraser. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.55 times less risky than Fraser. The stock trades about -0.03 of its potential returns per unit of risk. The Fraser and Neave is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 78.00 in Fraser and Neave on September 3, 2024 and sell it today you would earn a total of 34.00 from holding Fraser and Neave or generate 43.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Fraser and Neave
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Fraser and Neave |
Telkom Indonesia and Fraser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Fraser
The main advantage of trading using opposite Telkom Indonesia and Fraser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Fraser 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 Fraser will offset losses from the drop in Fraser's long position.| Telkom Indonesia vs. Highway Holdings Limited | Telkom Indonesia vs. QCR Holdings | Telkom Indonesia vs. Partner Communications | Telkom Indonesia vs. Acumen Pharmaceuticals |
| Fraser vs. Kellanova | Fraser vs. Lancaster Colony | Fraser vs. The A2 Milk | Fraser vs. Altavoz Entertainment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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