Correlation Between Telkom Indonesia and Alumindo Light
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Alumindo Light 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 Alumindo Light 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 Alumindo Light Metal, you can compare the effects of market volatilities on Telkom Indonesia and Alumindo Light 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 Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Alumindo Light.
Diversification Opportunities for Telkom Indonesia and Alumindo Light
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Telkom and Alumindo is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal 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 Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Alumindo Light go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Alumindo Light
If you would invest 7,400 in Alumindo Light Metal on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Alumindo Light Metal or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Alumindo Light Metal
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Alumindo Light Metal |
Telkom Indonesia and Alumindo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Alumindo Light
The main advantage of trading using opposite Telkom Indonesia and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light's long position.| Telkom Indonesia vs. Astra International Tbk | Telkom Indonesia vs. Bank Rakyat Indonesia | Telkom Indonesia vs. Bank Mandiri Persero | Telkom Indonesia vs. Bank Central Asia |
| Alumindo Light vs. Timah Persero Tbk | Alumindo Light vs. Semen Indonesia Persero | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light vs. Jakarta Int Hotels |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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