Correlation Between Telkom Indonesia and PSB Holdings
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and PSB Holdings 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 PSB Holdings 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 PSB Holdings, you can compare the effects of market volatilities on Telkom Indonesia and PSB Holdings 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 PSB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and PSB Holdings.
Diversification Opportunities for Telkom Indonesia and PSB Holdings
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and PSB is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and PSB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSB Holdings 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 PSB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSB Holdings has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and PSB Holdings go up and down completely randomly.
Pair Corralation between Telkom Indonesia and PSB Holdings
If you would invest 0.00 in PSB Holdings on August 31, 2024 and sell it today you would earn a total of 0.00 from holding PSB Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. PSB Holdings
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| PSB Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Telkom Indonesia and PSB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and PSB Holdings
The main advantage of trading using opposite Telkom Indonesia and PSB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, PSB Holdings 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 PSB Holdings will offset losses from the drop in PSB Holdings' long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Verizon Communications |
| PSB Holdings vs. Eagle Financial Services | PSB Holdings vs. National Capital Bank | PSB Holdings vs. Community Heritage Financial | PSB Holdings vs. Citizens Financial Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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