Correlation Between Telkom Indonesia and Imperial Brands
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Imperial Brands 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 Imperial Brands 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 Imperial Brands PLC, you can compare the effects of market volatilities on Telkom Indonesia and Imperial Brands 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 Imperial Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Imperial Brands.
Diversification Opportunities for Telkom Indonesia and Imperial Brands
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Imperial is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Imperial Brands PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Brands 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 Imperial Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Brands PLC has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Imperial Brands go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Imperial Brands
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Imperial Brands. In addition to that, Telkom Indonesia is 1.43 times more volatile than Imperial Brands PLC. It trades about -0.22 of its total potential returns per unit of risk. Imperial Brands PLC is currently generating about 0.15 per unit of volatility. If you would invest 2,920 in Imperial Brands PLC on August 26, 2024 and sell it today you would earn a total of 256.00 from holding Imperial Brands PLC or generate 8.77% 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. Imperial Brands PLC
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Imperial Brands PLC |
Telkom Indonesia and Imperial Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Imperial Brands
The main advantage of trading using opposite Telkom Indonesia and Imperial Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Imperial Brands 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 Imperial Brands will offset losses from the drop in Imperial Brands' 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 |
| Imperial Brands vs. Embotelladora Andina SA | Imperial Brands vs. Signet International Holdings | Imperial Brands vs. National Beverage Corp | Imperial Brands vs. PT Astra International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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