Correlation Between Telkom Indonesia and QNB Corp
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and QNB Corp 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 QNB Corp 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 QNB Corp, you can compare the effects of market volatilities on Telkom Indonesia and QNB Corp 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 QNB Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and QNB Corp.
Diversification Opportunities for Telkom Indonesia and QNB Corp
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and QNB is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and QNB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QNB 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 QNB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QNB Corp has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and QNB Corp go up and down completely randomly.
Pair Corralation between Telkom Indonesia and QNB Corp
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the QNB Corp. In addition to that, Telkom Indonesia is 1.15 times more volatile than QNB Corp. It trades about -0.06 of its total potential returns per unit of risk. QNB Corp is currently generating about 0.15 per unit of volatility. If you would invest 2,118 in QNB Corp on September 1, 2024 and sell it today you would earn a total of 1,182 from holding QNB Corp or generate 55.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 86.62% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. QNB Corp
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| QNB Corp |
Telkom Indonesia and QNB Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and QNB Corp
The main advantage of trading using opposite Telkom Indonesia and QNB Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, QNB Corp 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 QNB Corp will offset losses from the drop in QNB Corp's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Charter Communications |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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