Correlation Between Telkom Indonesia and Kongsberg Gruppen
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Kongsberg Gruppen 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 Kongsberg Gruppen 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 Kongsberg Gruppen ASA, you can compare the effects of market volatilities on Telkom Indonesia and Kongsberg Gruppen 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 Kongsberg Gruppen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Kongsberg Gruppen.
Diversification Opportunities for Telkom Indonesia and Kongsberg Gruppen
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Kongsberg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Kongsberg Gruppen ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Gruppen ASA 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 Kongsberg Gruppen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Gruppen ASA has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Kongsberg Gruppen go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Kongsberg Gruppen
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Kongsberg Gruppen. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 2.93 times less risky than Kongsberg Gruppen. The stock trades about -0.07 of its potential returns per unit of risk. The Kongsberg Gruppen ASA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,050 in Kongsberg Gruppen ASA on September 2, 2024 and sell it today you would earn a total of 6,550 from holding Kongsberg Gruppen ASA or generate 161.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 66.94% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Kongsberg Gruppen ASA
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Kongsberg Gruppen ASA |
Telkom Indonesia and Kongsberg Gruppen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Kongsberg Gruppen
The main advantage of trading using opposite Telkom Indonesia and Kongsberg Gruppen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Kongsberg Gruppen 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 Kongsberg Gruppen will offset losses from the drop in Kongsberg Gruppen's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Charter Communications |
| Kongsberg Gruppen vs. Firan Technology Group | Kongsberg Gruppen vs. 808 Renewable Energy | Kongsberg Gruppen vs. Park Electrochemical | Kongsberg Gruppen vs. Innovative Solutions and |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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