Correlation Between Telkom Indonesia and SINOPHARM GROUP
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and SINOPHARM GROUP 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 SINOPHARM GROUP 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 SINOPHARM GROUP LTD, you can compare the effects of market volatilities on Telkom Indonesia and SINOPHARM GROUP 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 SINOPHARM GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and SINOPHARM GROUP.
Diversification Opportunities for Telkom Indonesia and SINOPHARM GROUP
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and SINOPHARM is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and SINOPHARM GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINOPHARM GROUP LTD 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 SINOPHARM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINOPHARM GROUP LTD has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and SINOPHARM GROUP go up and down completely randomly.
Pair Corralation between Telkom Indonesia and SINOPHARM GROUP
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the SINOPHARM GROUP. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.68 times less risky than SINOPHARM GROUP. The stock trades about -0.07 of its potential returns per unit of risk. The SINOPHARM GROUP LTD is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,621 in SINOPHARM GROUP LTD on August 31, 2024 and sell it today you would lose (290.00) from holding SINOPHARM GROUP LTD or give up 17.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. SINOPHARM GROUP LTD
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| SINOPHARM GROUP LTD |
Telkom Indonesia and SINOPHARM GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and SINOPHARM GROUP
The main advantage of trading using opposite Telkom Indonesia and SINOPHARM GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, SINOPHARM GROUP 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 SINOPHARM GROUP will offset losses from the drop in SINOPHARM GROUP's long position.| Telkom Indonesia vs. RLJ Lodging Trust | Telkom Indonesia vs. Aquagold International | Telkom Indonesia vs. Stepstone Group | Telkom Indonesia vs. Morningstar Unconstrained Allocation |
| SINOPHARM GROUP vs. McKesson | SINOPHARM GROUP vs. Cardinal Health | SINOPHARM GROUP vs. Henry Schein | SINOPHARM GROUP vs. Patterson Companies |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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