Correlation Between Telkom Indonesia and Waskita Beton
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Waskita Beton 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 Waskita Beton 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 Waskita Beton Precast, you can compare the effects of market volatilities on Telkom Indonesia and Waskita Beton 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 Waskita Beton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Waskita Beton.
Diversification Opportunities for Telkom Indonesia and Waskita Beton
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Telkom and Waskita is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Waskita Beton Precast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waskita Beton Precast 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 Waskita Beton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waskita Beton Precast has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Waskita Beton go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Waskita Beton
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 0.46 times more return on investment than Waskita Beton. However, Telkom Indonesia Tbk is 2.15 times less risky than Waskita Beton. It trades about -0.1 of its potential returns per unit of risk. Waskita Beton Precast is currently generating about -0.15 per unit of risk. If you would invest 308,000 in Telkom Indonesia Tbk on September 3, 2024 and sell it today you would lose (37,000) from holding Telkom Indonesia Tbk or give up 12.01% 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. Waskita Beton Precast
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Waskita Beton Precast |
Telkom Indonesia and Waskita Beton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Waskita Beton
The main advantage of trading using opposite Telkom Indonesia and Waskita Beton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Waskita Beton 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 Waskita Beton will offset losses from the drop in Waskita Beton'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 |
| Waskita Beton vs. Timah Persero Tbk | Waskita Beton vs. Semen Indonesia Persero | Waskita Beton vs. Mitra Pinasthika Mustika | Waskita Beton 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |