Correlation Between Telkom Indonesia and U S Cellular
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and U S Cellular 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 U S Cellular 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 United States Cellular, you can compare the effects of market volatilities on Telkom Indonesia and U S Cellular 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 U S Cellular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and U S Cellular.
Diversification Opportunities for Telkom Indonesia and U S Cellular
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and USM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 U S Cellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and U S Cellular go up and down completely randomly.
Pair Corralation between Telkom Indonesia and U S Cellular
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the U S Cellular. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.6 times less risky than U S Cellular. The stock trades about -0.02 of its potential returns per unit of risk. The United States Cellular is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,822 in United States Cellular on August 24, 2024 and sell it today you would earn a total of 1,572 from holding United States Cellular or generate 32.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. United States Cellular
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| United States Cellular |
Telkom Indonesia and U S Cellular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and U S Cellular
The main advantage of trading using opposite Telkom Indonesia and U S Cellular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, U S Cellular 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 U S Cellular will offset losses from the drop in U S Cellular's long position.| Telkom Indonesia vs. Small Cap Core | Telkom Indonesia vs. FitLife Brands, Common | Telkom Indonesia vs. Mutual Of America | Telkom Indonesia vs. Gfl Environmental Holdings |
| U S Cellular vs. Telephone and Data | U S Cellular vs. Vodafone Group PLC | U S Cellular vs. Lumen Technologies | U S Cellular vs. Altice USA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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