Correlation Between Telkom Indonesia and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Telkom Indonesia and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Trias Sentosa.
Diversification Opportunities for Telkom Indonesia and Trias Sentosa
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Trias is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Trias Sentosa go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Trias Sentosa
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 0.61 times more return on investment than Trias Sentosa. However, Telkom Indonesia Tbk is 1.64 times less risky than Trias Sentosa. It trades about -0.03 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about -0.02 per unit of risk. If you would invest 349,082 in Telkom Indonesia Tbk on September 3, 2024 and sell it today you would lose (78,082) from holding Telkom Indonesia Tbk or give up 22.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Trias Sentosa Tbk |
Telkom Indonesia and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Trias Sentosa
The main advantage of trading using opposite Telkom Indonesia and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa'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 |
| Trias Sentosa vs. Suparma Tbk | Trias Sentosa vs. Champion Pacific Indonesia | Trias Sentosa vs. Indo Acidatama Tbk | Trias Sentosa vs. Unggul Indah Cahaya |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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