Correlation Between Telkom Indonesia and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Singapore Telecommunicatio 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 Singapore Telecommunicatio 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 Singapore Telecommunications PK, you can compare the effects of market volatilities on Telkom Indonesia and Singapore Telecommunicatio 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 Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Singapore Telecommunicatio.
Diversification Opportunities for Telkom Indonesia and Singapore Telecommunicatio
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and Singapore is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Singapore Telecommunications P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Singapore Telecommunicatio
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Singapore Telecommunicatio. In addition to that, Telkom Indonesia is 1.33 times more volatile than Singapore Telecommunications PK. It trades about -0.18 of its total potential returns per unit of risk. Singapore Telecommunications PK is currently generating about -0.22 per unit of volatility. If you would invest 2,416 in Singapore Telecommunications PK on August 29, 2024 and sell it today you would lose (183.00) from holding Singapore Telecommunications PK or give up 7.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Singapore Telecommunications P
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Singapore Telecommunicatio |
Telkom Indonesia and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Singapore Telecommunicatio
The main advantage of trading using opposite Telkom Indonesia and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Singapore Telecommunicatio 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 Singapore Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio'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 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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