Correlation Between Telkom Indonesia and Focus Financial
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Focus 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 Focus 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 Focus Financial Partners, you can compare the effects of market volatilities on Telkom Indonesia and Focus 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 Focus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Focus Financial.
Diversification Opportunities for Telkom Indonesia and Focus Financial
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Focus is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Focus Financial Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Financial Partners 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 Focus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Financial Partners has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Focus Financial go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Focus Financial
If you would invest 5,216 in Focus Financial Partners on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Focus Financial Partners or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Focus Financial Partners
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Focus Financial Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and Focus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Focus Financial
The main advantage of trading using opposite Telkom Indonesia and Focus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Focus 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 Focus Financial will offset losses from the drop in Focus Financial's long position.| Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Cable One | Telkom Indonesia vs. Liberty Broadband Corp | Telkom Indonesia vs. Liberty Global PLC |
| Focus Financial vs. Federated Premier Municipal | Focus Financial vs. Blackrock Muniyield | Focus Financial vs. Diamond Hill Investment | Focus Financial vs. NXG NextGen Infrastructure |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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