Correlation Between Telkom Indonesia and Fonu2
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Fonu2 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 Fonu2 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 Fonu2 Inc, you can compare the effects of market volatilities on Telkom Indonesia and Fonu2 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 Fonu2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Fonu2.
Diversification Opportunities for Telkom Indonesia and Fonu2
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Fonu2 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Fonu2 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonu2 Inc 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 Fonu2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonu2 Inc has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Fonu2 go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Fonu2
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Fonu2. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 145.97 times less risky than Fonu2. The stock trades about -0.03 of its potential returns per unit of risk. The Fonu2 Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Fonu2 Inc on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Fonu2 Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Fonu2 Inc
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Fonu2 Inc |
Telkom Indonesia and Fonu2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Fonu2
The main advantage of trading using opposite Telkom Indonesia and Fonu2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Fonu2 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 Fonu2 will offset losses from the drop in Fonu2'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 |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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