Correlation Between Telkom Indonesia and Pacific Financial
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Pacific Financial 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 Pacific Financial 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 Pacific Financial Corp, you can compare the effects of market volatilities on Telkom Indonesia and Pacific Financial 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 Pacific Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Pacific Financial.
Diversification Opportunities for Telkom Indonesia and Pacific Financial
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Pacific is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Pacific Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Financial Corp 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 Pacific Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Financial Corp has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Pacific Financial go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Pacific Financial
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Pacific Financial. In addition to that, Telkom Indonesia is 1.17 times more volatile than Pacific Financial Corp. It trades about -0.03 of its total potential returns per unit of risk. Pacific Financial Corp is currently generating about 0.16 per unit of volatility. If you would invest 975.00 in Pacific Financial Corp on September 2, 2024 and sell it today you would earn a total of 325.00 from holding Pacific Financial Corp or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Pacific Financial Corp
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Pacific Financial Corp |
Telkom Indonesia and Pacific Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Pacific Financial
The main advantage of trading using opposite Telkom Indonesia and Pacific Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Pacific Financial 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 Pacific Financial will offset losses from the drop in Pacific Financial's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Charter Communications |
| Pacific Financial vs. Pioneer Bankcorp | Pacific Financial vs. Liberty Northwest Bancorp | Pacific Financial vs. First Community | Pacific Financial vs. Coeur dAlene 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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