Correlation Between Telkom Indonesia and Liberty Latin
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Liberty Latin 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 Liberty Latin 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 Liberty Latin America, you can compare the effects of market volatilities on Telkom Indonesia and Liberty Latin 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 Liberty Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Liberty Latin.
Diversification Opportunities for Telkom Indonesia and Liberty Latin
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Telkom and Liberty is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Liberty Latin America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Latin America 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 Liberty Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Latin America has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Liberty Latin go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Liberty Latin
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Liberty Latin. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.22 times less risky than Liberty Latin. The stock trades about -0.11 of its potential returns per unit of risk. The Liberty Latin America is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 666.00 in Liberty Latin America on November 18, 2024 and sell it today you would earn a total of 67.00 from holding Liberty Latin America or generate 10.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Liberty Latin America
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Liberty Latin America |
Telkom Indonesia and Liberty Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Liberty Latin
The main advantage of trading using opposite Telkom Indonesia and Liberty Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Liberty Latin 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 Liberty Latin will offset losses from the drop in Liberty Latin'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 |
| Liberty Latin vs. Liberty Global PLC | Liberty Latin vs. Liberty Global PLC | Liberty Latin vs. Liberty Broadband Srs | Liberty Latin vs. Shenandoah Telecommunications 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |