Correlation Between Telkom Indonesia and Humble Fume
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Humble Fume 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 Humble Fume 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 Humble Fume, you can compare the effects of market volatilities on Telkom Indonesia and Humble Fume 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 Humble Fume. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Humble Fume.
Diversification Opportunities for Telkom Indonesia and Humble Fume
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Humble is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Humble Fume in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humble Fume 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 Humble Fume. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humble Fume has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Humble Fume go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Humble Fume
If you would invest 18.00 in Telkom Indonesia Tbk on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Telkom Indonesia Tbk or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Humble Fume
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Humble Fume |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telkom Indonesia and Humble Fume Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Humble Fume
The main advantage of trading using opposite Telkom Indonesia and Humble Fume positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Humble Fume 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 Humble Fume will offset losses from the drop in Humble Fume's long position.| Telkom Indonesia vs. KDDI Corp | Telkom Indonesia vs. Amrica Mvil, SAB | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. FingerMotion |
| Humble Fume vs. PT Hanjaya Mandala | Humble Fume vs. Greenlane Holdings | Humble Fume vs. Pyxus International | Humble Fume vs. 22nd Century Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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