Correlation Between Telkom Indonesia and Universal Media
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Universal Media 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 Universal Media 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 Universal Media Group, you can compare the effects of market volatilities on Telkom Indonesia and Universal Media 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 Universal Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Universal Media.
Diversification Opportunities for Telkom Indonesia and Universal Media
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telkom and Universal is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Universal Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Media Group 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 Universal Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Media Group has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Universal Media go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Universal Media
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Universal Media. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 11.55 times less risky than Universal Media. The stock trades about -0.17 of its potential returns per unit of risk. The Universal Media Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3.30 in Universal Media Group on August 30, 2024 and sell it today you would earn a total of 0.39 from holding Universal Media Group or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Universal Media Group
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Universal Media Group |
Telkom Indonesia and Universal Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Universal Media
The main advantage of trading using opposite Telkom Indonesia and Universal Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Universal Media 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 Universal Media will offset losses from the drop in Universal Media'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 |
| Universal Media vs. Kura Sushi USA | Universal Media vs. Kinsale Capital Group | Universal Media vs. GoHealth | Universal Media vs. RCI Hospitality Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |