Correlation Between Telkom Indonesia and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and InPlay Oil 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 InPlay Oil 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 InPlay Oil Corp, you can compare the effects of market volatilities on Telkom Indonesia and InPlay Oil 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 InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and InPlay Oil.
Diversification Opportunities for Telkom Indonesia and InPlay Oil
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and InPlay is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp 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 InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and InPlay Oil go up and down completely randomly.
Pair Corralation between Telkom Indonesia and InPlay Oil
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the InPlay Oil. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.17 times less risky than InPlay Oil. The stock trades about -0.19 of its potential returns per unit of risk. The InPlay Oil Corp is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 142.00 in InPlay Oil Corp on August 29, 2024 and sell it today you would lose (15.00) from holding InPlay Oil Corp or give up 10.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. InPlay Oil Corp
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| InPlay Oil Corp |
Telkom Indonesia and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and InPlay Oil
The main advantage of trading using opposite Telkom Indonesia and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Cable One | Telkom Indonesia vs. Liberty Broadband Corp | Telkom Indonesia vs. Liberty Global PLC |
| InPlay Oil vs. Yamaha Motor Co | InPlay Oil vs. Nitto Denko Corp | InPlay Oil vs. Farmers Merchants Bancorp | InPlay Oil vs. Furukawa Electric 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |