Correlation Between Telkom Indonesia and Hanover House
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Hanover House 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 Hanover House 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 Hanover House, you can compare the effects of market volatilities on Telkom Indonesia and Hanover House 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 Hanover House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Hanover House.
Diversification Opportunities for Telkom Indonesia and Hanover House
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Hanover is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Hanover House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover House 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 Hanover House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover House has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Hanover House go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Hanover House
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Hanover House. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 5.28 times less risky than Hanover House. The stock trades about -0.06 of its potential returns per unit of risk. The Hanover House is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.63 in Hanover House on September 1, 2024 and sell it today you would earn a total of 0.17 from holding Hanover House or generate 26.98% 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. Hanover House
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Hanover House |
Telkom Indonesia and Hanover House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Hanover House
The main advantage of trading using opposite Telkom Indonesia and Hanover House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Hanover House 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 Hanover House will offset losses from the drop in Hanover House's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Charter Communications |
| Hanover House vs. Sanwire | Hanover House vs. SNM Gobal Holdings | Hanover House vs. All For One | Hanover House vs. Ggtoor Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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