Correlation Between Telkom Indonesia and Haleon Plc
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Haleon Plc 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 Haleon Plc 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 Haleon plc, you can compare the effects of market volatilities on Telkom Indonesia and Haleon Plc 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 Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Haleon Plc.
Diversification Opportunities for Telkom Indonesia and Haleon Plc
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Telkom and Haleon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc 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 Haleon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon plc has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Haleon Plc go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Haleon Plc
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Haleon Plc. In addition to that, Telkom Indonesia is 1.4 times more volatile than Haleon plc. It trades about -0.15 of its total potential returns per unit of risk. Haleon plc is currently generating about -0.03 per unit of volatility. If you would invest 480.00 in Haleon plc on August 27, 2024 and sell it today you would lose (6.00) from holding Haleon plc or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Haleon plc
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Haleon plc |
Telkom Indonesia and Haleon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Haleon Plc
The main advantage of trading using opposite Telkom Indonesia and Haleon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Haleon Plc 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 Haleon Plc will offset losses from the drop in Haleon Plc's long position.| Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Shenandoah Telecommunications Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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