Correlation Between Telkom Indonesia and Muncy Bank
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Muncy Bank 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 Muncy Bank 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 Muncy Bank Financial, you can compare the effects of market volatilities on Telkom Indonesia and Muncy Bank 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 Muncy Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Muncy Bank.
Diversification Opportunities for Telkom Indonesia and Muncy Bank
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Muncy is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Muncy Bank Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muncy Bank Financial 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 Muncy Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muncy Bank Financial has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Muncy Bank go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Muncy Bank
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to generate 0.6 times more return on investment than Muncy Bank. However, Telkom Indonesia Tbk is 1.66 times less risky than Muncy Bank. It trades about -0.03 of its potential returns per unit of risk. Muncy Bank Financial is currently generating about -0.02 per unit of risk. If you would invest 2,142 in Telkom Indonesia Tbk on August 29, 2024 and sell it today you would lose (461.00) from holding Telkom Indonesia Tbk or give up 21.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.45% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Muncy Bank Financial
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Muncy Bank Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and Muncy Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Muncy Bank
The main advantage of trading using opposite Telkom Indonesia and Muncy Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Muncy Bank 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 Muncy Bank will offset losses from the drop in Muncy Bank'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 |
| Muncy Bank vs. Main Street Financial | Muncy Bank vs. Susquehanna Community Financial | Muncy Bank vs. First Keystone Corp | Muncy Bank vs. Mifflinburg Bancorp |
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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