Correlation Between Telkom Indonesia and NSTAR Electric
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and NSTAR Electric 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 NSTAR Electric 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 NSTAR Electric, you can compare the effects of market volatilities on Telkom Indonesia and NSTAR Electric 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 NSTAR Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and NSTAR Electric.
Diversification Opportunities for Telkom Indonesia and NSTAR Electric
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and NSTAR is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and NSTAR Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR Electric 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 NSTAR Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR Electric has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and NSTAR Electric go up and down completely randomly.
Pair Corralation between Telkom Indonesia and NSTAR Electric
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to generate 16.46 times more return on investment than NSTAR Electric. However, Telkom Indonesia is 16.46 times more volatile than NSTAR Electric. It trades about 0.14 of its potential returns per unit of risk. NSTAR Electric is currently generating about 0.22 per unit of risk. If you would invest 1,626 in Telkom Indonesia Tbk on September 13, 2024 and sell it today you would earn a total of 102.00 from holding Telkom Indonesia Tbk or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. NSTAR Electric
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| NSTAR Electric |
Telkom Indonesia and NSTAR Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and NSTAR Electric
The main advantage of trading using opposite Telkom Indonesia and NSTAR Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, NSTAR Electric 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 NSTAR Electric will offset losses from the drop in NSTAR Electric'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 |
| NSTAR Electric vs. AMCON Distributing | NSTAR Electric vs. Marfrig Global Foods | NSTAR Electric vs. Vishay Precision Group | NSTAR Electric vs. Everspin Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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