Correlation Between Telkom Indonesia and Eltek
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Eltek 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 Eltek 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 Eltek, you can compare the effects of market volatilities on Telkom Indonesia and Eltek 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 Eltek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Eltek.
Diversification Opportunities for Telkom Indonesia and Eltek
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telkom and Eltek is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek 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 Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Eltek go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Eltek
If you would invest 1,115 in Eltek on December 9, 2024 and sell it today you would earn a total of 13.00 from holding Eltek or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Eltek
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Eltek |
Telkom Indonesia and Eltek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Eltek
The main advantage of trading using opposite Telkom Indonesia and Eltek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Eltek 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 Eltek will offset losses from the drop in Eltek's long position.| Telkom Indonesia vs. Vodafone Group PLC | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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