Correlation Between Telkom Indonesia and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Niagara Mohawk 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 Niagara Mohawk 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 Niagara Mohawk Power, you can compare the effects of market volatilities on Telkom Indonesia and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Niagara Mohawk.
Diversification Opportunities for Telkom Indonesia and Niagara Mohawk
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Niagara is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Niagara Mohawk
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Niagara Mohawk. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.8 times less risky than Niagara Mohawk. The stock trades about -0.03 of its potential returns per unit of risk. The Niagara Mohawk Power is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,598 in Niagara Mohawk Power on September 4, 2024 and sell it today you would lose (38.00) from holding Niagara Mohawk Power or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Niagara Mohawk Power
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Niagara Mohawk Power |
Telkom Indonesia and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Niagara Mohawk
The main advantage of trading using opposite Telkom Indonesia and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Charter Communications | Telkom Indonesia vs. Vodafone Group PLC |
| Niagara Mohawk vs. Teleflex Incorporated | Niagara Mohawk vs. HUTCHMED DRC | Niagara Mohawk vs. Amgen Inc | Niagara Mohawk vs. Radcom |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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