Correlation Between Telkom Indonesia and Siantar Top
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Siantar Top 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 Siantar Top 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 Siantar Top Tbk, you can compare the effects of market volatilities on Telkom Indonesia and Siantar Top 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 Siantar Top. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Siantar Top.
Diversification Opportunities for Telkom Indonesia and Siantar Top
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Telkom and Siantar is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Siantar Top Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siantar Top Tbk 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 Siantar Top. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siantar Top Tbk has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Siantar Top go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Siantar Top
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Siantar Top. In addition to that, Telkom Indonesia is 3.01 times more volatile than Siantar Top Tbk. It trades about -0.11 of its total potential returns per unit of risk. Siantar Top Tbk is currently generating about -0.09 per unit of volatility. If you would invest 1,442,500 in Siantar Top Tbk on August 27, 2024 and sell it today you would lose (22,500) from holding Siantar Top Tbk or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Siantar Top Tbk
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Siantar Top Tbk |
Telkom Indonesia and Siantar Top Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Siantar Top
The main advantage of trading using opposite Telkom Indonesia and Siantar Top positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Siantar Top 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 Siantar Top will offset losses from the drop in Siantar Top's long position.| Telkom Indonesia vs. Mnc Land Tbk | Telkom Indonesia vs. MNC Vision Networks | Telkom Indonesia vs. Medikaloka Hermina PT |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |