Correlation Between Telkom Indonesia and Sabre Gold
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Sabre Gold 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 Sabre Gold 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 Sabre Gold Mines, you can compare the effects of market volatilities on Telkom Indonesia and Sabre Gold 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 Sabre Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Sabre Gold.
Diversification Opportunities for Telkom Indonesia and Sabre Gold
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Sabre is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Sabre Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Gold Mines 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 Sabre Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Gold Mines has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Sabre Gold go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Sabre Gold
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Sabre Gold. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 5.32 times less risky than Sabre Gold. The stock trades about -0.03 of its potential returns per unit of risk. The Sabre Gold Mines is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Sabre Gold Mines on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Sabre Gold Mines or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Sabre Gold Mines
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Sabre Gold Mines |
Telkom Indonesia and Sabre Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Sabre Gold
The main advantage of trading using opposite Telkom Indonesia and Sabre Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Sabre Gold 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 Sabre Gold will offset losses from the drop in Sabre Gold's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Charter Communications | Telkom Indonesia vs. Vodafone Group PLC |
| Sabre Gold vs. Telefonica Brasil SA | Sabre Gold vs. Vodafone Group PLC | Sabre Gold vs. Grupo Televisa SAB | Sabre Gold vs. America Movil SAB |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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