Correlation Between Telkom Indonesia and Sumitomo Electric
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Sumitomo Electric 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 Sumitomo Electric 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 Sumitomo Electric Industries, you can compare the effects of market volatilities on Telkom Indonesia and Sumitomo Electric 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 Sumitomo Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Sumitomo Electric.
Diversification Opportunities for Telkom Indonesia and Sumitomo Electric
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Sumitomo is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Sumitomo Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Electric 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 Sumitomo Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Electric has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Sumitomo Electric go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Sumitomo Electric
If you would invest 1,657 in Sumitomo Electric Industries on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Sumitomo Electric Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Sumitomo Electric Industries
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Sumitomo Electric |
Telkom Indonesia and Sumitomo Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Sumitomo Electric
The main advantage of trading using opposite Telkom Indonesia and Sumitomo Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Sumitomo Electric 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 Sumitomo Electric will offset losses from the drop in Sumitomo Electric's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Lumen Technologies | Telkom Indonesia vs. Charter Communications |
| Sumitomo Electric vs. Micron Technology | Sumitomo Electric vs. Elmos Semiconductor SE | Sumitomo Electric vs. ASE Industrial Holding | Sumitomo Electric vs. Perseus Mining Limited |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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