Correlation Between Telkom Indonesia and Rain Therapeutics
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Rain Therapeutics 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 Rain Therapeutics 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 Rain Therapeutics, you can compare the effects of market volatilities on Telkom Indonesia and Rain Therapeutics 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 Rain Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Rain Therapeutics.
Diversification Opportunities for Telkom Indonesia and Rain Therapeutics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and Rain is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Rain Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rain Therapeutics 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 Rain Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rain Therapeutics has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Rain Therapeutics go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Rain Therapeutics
If you would invest 141.00 in Rain Therapeutics on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Rain Therapeutics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.27% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Rain Therapeutics
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Rain Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and Rain Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Rain Therapeutics
The main advantage of trading using opposite Telkom Indonesia and Rain Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Rain Therapeutics 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 Rain Therapeutics will offset losses from the drop in Rain Therapeutics' long position.| Telkom Indonesia vs. RLJ Lodging Trust | Telkom Indonesia vs. Aquagold International | Telkom Indonesia vs. Stepstone Group | Telkom Indonesia vs. Morningstar Unconstrained Allocation |
| Rain Therapeutics vs. Ocean Biomedical | Rain Therapeutics vs. Enveric Biosciences | Rain Therapeutics vs. Elevation Oncology | Rain Therapeutics vs. Hepion 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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