Correlation Between Telkom Indonesia and Hop On
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Hop On 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 Hop On 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 Hop On Inc, you can compare the effects of market volatilities on Telkom Indonesia and Hop On 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 Hop On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Hop On.
Diversification Opportunities for Telkom Indonesia and Hop On
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Hop is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Hop On Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hop On 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 Hop On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hop On Inc has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Hop On go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Hop On
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Hop On. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 6.92 times less risky than Hop On. The stock trades about -0.19 of its potential returns per unit of risk. The Hop On Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Hop On Inc on August 29, 2024 and sell it today you would earn a total of 0.03 from holding Hop On Inc or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Hop On Inc
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Hop On Inc |
Telkom Indonesia and Hop On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Hop On
The main advantage of trading using opposite Telkom Indonesia and Hop On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Hop On 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 Hop On will offset losses from the drop in Hop On'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 |
| Hop On vs. Boxlight Corp Class | Hop On vs. Siyata Mobile | Hop On vs. ClearOne | Hop On vs. Mobilicom Limited American |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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