Correlation Between Telkom Indonesia and Luduson G
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Luduson G 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 Luduson G 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 Luduson G, you can compare the effects of market volatilities on Telkom Indonesia and Luduson G 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 Luduson G. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Luduson G.
Diversification Opportunities for Telkom Indonesia and Luduson G
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and Luduson is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Luduson G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luduson G 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 Luduson G. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luduson G has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Luduson G go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Luduson G
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Luduson G. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 31.91 times less risky than Luduson G. The stock trades about -0.06 of its potential returns per unit of risk. The Luduson G is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Luduson G on August 30, 2024 and sell it today you would lose (19.52) from holding Luduson G or give up 97.6% 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. Luduson G
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Luduson G |
Telkom Indonesia and Luduson G Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Luduson G
The main advantage of trading using opposite Telkom Indonesia and Luduson G positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Luduson G 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 Luduson G will offset losses from the drop in Luduson G'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 |
| Luduson G vs. Warner Music Group | Luduson G vs. Live Nation Entertainment | Luduson G vs. Atlanta Braves Holdings, | Luduson G vs. Warner Bros Discovery |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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