Correlation Between Telkom Indonesia and Crescera Capital
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Crescera Capital 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 Crescera Capital 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 Crescera Capital Acquisition, you can compare the effects of market volatilities on Telkom Indonesia and Crescera Capital 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 Crescera Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Crescera Capital.
Diversification Opportunities for Telkom Indonesia and Crescera Capital
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Crescera is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Crescera Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescera Capital Acq 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 Crescera Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescera Capital Acq has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Crescera Capital go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Crescera Capital
Assuming the 90 days horizon Telkom Indonesia Tbk is expected to under-perform the Crescera Capital. But the pink sheet apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 8.71 times less risky than Crescera Capital. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Crescera Capital Acquisition is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5.20 in Crescera Capital Acquisition on September 2, 2024 and sell it today you would lose (0.05) from holding Crescera Capital Acquisition or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 6.28% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Crescera Capital Acquisition
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Crescera Capital Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and Crescera Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Crescera Capital
The main advantage of trading using opposite Telkom Indonesia and Crescera Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Crescera Capital 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 Crescera Capital will offset losses from the drop in Crescera Capital's long position.| Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. Comcast Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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