Correlation Between Telkom Indonesia and Firan Technology
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Firan Technology 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 Firan Technology 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 Firan Technology Group, you can compare the effects of market volatilities on Telkom Indonesia and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Firan Technology.
Diversification Opportunities for Telkom Indonesia and Firan Technology
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Telkom and Firan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Firan Technology go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Firan Technology
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Firan Technology. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.39 times less risky than Firan Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Firan Technology Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 510.00 in Firan Technology Group on November 3, 2024 and sell it today you would earn a total of 61.00 from holding Firan Technology Group or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Firan Technology Group
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Firan Technology |
Telkom Indonesia and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Firan Technology
The main advantage of trading using opposite Telkom Indonesia and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology'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 |
| Firan Technology vs. 808 Renewable Energy | Firan Technology vs. Austal Limited | Firan Technology vs. Sky Harbour Group | Firan Technology vs. CPI Aerostructures |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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