Correlation Between Telkom Indonesia and Vericel Corp
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Vericel Corp 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 Vericel Corp 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 Vericel Corp Ord, you can compare the effects of market volatilities on Telkom Indonesia and Vericel Corp 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 Vericel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Vericel Corp.
Diversification Opportunities for Telkom Indonesia and Vericel Corp
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and Vericel is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Vericel Corp Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vericel Corp Ord 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 Vericel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vericel Corp Ord has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Vericel Corp go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Vericel Corp
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Vericel Corp. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.6 times less risky than Vericel Corp. The stock trades about -0.17 of its potential returns per unit of risk. The Vericel Corp Ord is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 4,583 in Vericel Corp Ord on August 30, 2024 and sell it today you would earn a total of 1,193 from holding Vericel Corp Ord or generate 26.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Vericel Corp Ord
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Vericel Corp Ord |
Telkom Indonesia and Vericel Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Vericel Corp
The main advantage of trading using opposite Telkom Indonesia and Vericel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Vericel Corp 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 Vericel Corp will offset losses from the drop in Vericel Corp'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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