Correlation Between Telkom Indonesia and Capital Financial
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Capital Financial 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 Capital Financial 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 Capital Financial Indonesia, you can compare the effects of market volatilities on Telkom Indonesia and Capital Financial 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 Capital Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Capital Financial.
Diversification Opportunities for Telkom Indonesia and Capital Financial
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Capital is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Capital Financial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial 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 Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Capital Financial go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Capital Financial
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 1.23 times more return on investment than Capital Financial. However, Telkom Indonesia is 1.23 times more volatile than Capital Financial Indonesia. It trades about -0.04 of its potential returns per unit of risk. Capital Financial Indonesia is currently generating about -0.18 per unit of risk. If you would invest 278,000 in Telkom Indonesia Tbk on September 2, 2024 and sell it today you would lose (7,000) from holding Telkom Indonesia Tbk or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Capital Financial Indonesia
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Capital Financial |
Telkom Indonesia and Capital Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Capital Financial
The main advantage of trading using opposite Telkom Indonesia and Capital Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Capital Financial 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 Capital Financial will offset losses from the drop in Capital Financial'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 |
| Capital Financial vs. Ace Hardware Indonesia | Capital Financial vs. Merdeka Copper Gold | Capital Financial vs. Mitra Pinasthika Mustika | Capital Financial 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |