Correlation Between Telkom Indonesia and Voestalpine
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Voestalpine 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 Voestalpine 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 Voestalpine AG PK, you can compare the effects of market volatilities on Telkom Indonesia and Voestalpine 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 Voestalpine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Voestalpine.
Diversification Opportunities for Telkom Indonesia and Voestalpine
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and Voestalpine is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Voestalpine AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine AG PK 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 Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG PK has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Voestalpine go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Voestalpine
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Voestalpine. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 2.09 times less risky than Voestalpine. The stock trades about -0.04 of its potential returns per unit of risk. The Voestalpine AG PK is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 493.00 in Voestalpine AG PK on September 19, 2024 and sell it today you would lose (108.00) from holding Voestalpine AG PK or give up 21.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Voestalpine AG PK
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Voestalpine AG PK |
Telkom Indonesia and Voestalpine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Voestalpine
The main advantage of trading using opposite Telkom Indonesia and Voestalpine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Voestalpine 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 Voestalpine will offset losses from the drop in Voestalpine's long position.| Telkom Indonesia vs. T Mobile | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Charter Communications | Telkom Indonesia vs. Vodafone Group PLC |
| Voestalpine vs. ArcelorMittal SA ADR | Voestalpine vs. Gerdau SA ADR | Voestalpine vs. POSCO Holdings | Voestalpine vs. HUMANA INC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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