Correlation Between Telkom Indonesia and PUDO
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and PUDO 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 PUDO 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 PUDO Inc, you can compare the effects of market volatilities on Telkom Indonesia and PUDO 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 PUDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and PUDO.
Diversification Opportunities for Telkom Indonesia and PUDO
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and PUDO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and PUDO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUDO Inc 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 PUDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUDO Inc has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and PUDO go up and down completely randomly.
Pair Corralation between Telkom Indonesia and PUDO
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the PUDO. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 15.73 times less risky than PUDO. The stock trades about -0.07 of its potential returns per unit of risk. The PUDO Inc is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 15.00 in PUDO Inc on September 3, 2024 and sell it today you would earn a total of 22.00 from holding PUDO Inc or generate 146.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. PUDO Inc
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| PUDO Inc |
Telkom Indonesia and PUDO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and PUDO
The main advantage of trading using opposite Telkom Indonesia and PUDO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, PUDO 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 PUDO will offset losses from the drop in PUDO's long position.| Telkom Indonesia vs. Highway Holdings Limited | Telkom Indonesia vs. QCR Holdings | Telkom Indonesia vs. Partner Communications | Telkom Indonesia vs. Acumen Pharmaceuticals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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