Correlation Between Telkom Indonesia and PLDT
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and PLDT 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 PLDT 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 PLDT Inc ADR, you can compare the effects of market volatilities on Telkom Indonesia and PLDT 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 PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and PLDT.
Diversification Opportunities for Telkom Indonesia and PLDT
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Telkom and PLDT is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and PLDT Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc ADR 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 PLDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLDT Inc ADR has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and PLDT go up and down completely randomly.
Pair Corralation between Telkom Indonesia and PLDT
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the PLDT. In addition to that, Telkom Indonesia is 1.98 times more volatile than PLDT Inc ADR. It trades about -0.03 of its total potential returns per unit of risk. PLDT Inc ADR is currently generating about 0.08 per unit of volatility. If you would invest 2,219 in PLDT Inc ADR on November 18, 2024 and sell it today you would earn a total of 121.00 from holding PLDT Inc ADR or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. PLDT Inc ADR
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| PLDT Inc ADR |
Telkom Indonesia and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and PLDT
The main advantage of trading using opposite Telkom Indonesia and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, PLDT 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 PLDT will offset losses from the drop in PLDT'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 |
| PLDT vs. KT Corporation | PLDT vs. Telefonica Brasil SA | PLDT vs. TIM Participacoes SA | PLDT vs. SK Telecom Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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