Correlation Between Telkom Indonesia and ImagineAR
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and ImagineAR 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 ImagineAR 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 ImagineAR, you can compare the effects of market volatilities on Telkom Indonesia and ImagineAR 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 ImagineAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and ImagineAR.
Diversification Opportunities for Telkom Indonesia and ImagineAR
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and ImagineAR is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and ImagineAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImagineAR 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 ImagineAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImagineAR has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and ImagineAR go up and down completely randomly.
Pair Corralation between Telkom Indonesia and ImagineAR
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the ImagineAR. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 8.49 times less risky than ImagineAR. The stock trades about -0.07 of its potential returns per unit of risk. The ImagineAR is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3.24 in ImagineAR on August 31, 2024 and sell it today you would earn a total of 3.58 from holding ImagineAR or generate 110.49% 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. ImagineAR
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| ImagineAR |
Telkom Indonesia and ImagineAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and ImagineAR
The main advantage of trading using opposite Telkom Indonesia and ImagineAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, ImagineAR 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 ImagineAR will offset losses from the drop in ImagineAR's long position.| Telkom Indonesia vs. RLJ Lodging Trust | Telkom Indonesia vs. Aquagold International | Telkom Indonesia vs. Stepstone Group | Telkom Indonesia vs. Morningstar Unconstrained Allocation |
| ImagineAR vs. Zerify Inc | ImagineAR vs. Smartmetric | ImagineAR vs. World Health Energy | ImagineAR vs. Plyzer Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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