Correlation Between Telkom Indonesia and FullNet Communications
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and FullNet Communications 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 FullNet Communications 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 FullNet Communications, you can compare the effects of market volatilities on Telkom Indonesia and FullNet Communications 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 FullNet Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and FullNet Communications.
Diversification Opportunities for Telkom Indonesia and FullNet Communications
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telkom and FullNet is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and FullNet Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FullNet Communications 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 FullNet Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FullNet Communications has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and FullNet Communications go up and down completely randomly.
Pair Corralation between Telkom Indonesia and FullNet Communications
Assuming the 90 days horizon Telkom Indonesia Tbk is expected to under-perform the FullNet Communications. But the pink sheet apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 4.07 times less risky than FullNet Communications. The pink sheet trades about -0.04 of its potential returns per unit of risk. The FullNet Communications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 18.00 in FullNet Communications on September 12, 2024 and sell it today you would earn a total of 19.00 from holding FullNet Communications or generate 105.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. FullNet Communications
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| FullNet Communications |
Telkom Indonesia and FullNet Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and FullNet Communications
The main advantage of trading using opposite Telkom Indonesia and FullNet Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, FullNet Communications 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 FullNet Communications will offset losses from the drop in FullNet Communications' long position.| Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. Comcast Corp | Telkom Indonesia vs. Deutsche Telekom AG |
| FullNet Communications vs. ATT Inc | FullNet Communications vs. Tele2 AB | FullNet Communications vs. Proximus NV ADR | FullNet Communications vs. Telstra Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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