Correlation Between Telkom Indonesia and NightFood Holdings
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and NightFood Holdings 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 NightFood Holdings 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 NightFood Holdings, you can compare the effects of market volatilities on Telkom Indonesia and NightFood Holdings 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 NightFood Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and NightFood Holdings.
Diversification Opportunities for Telkom Indonesia and NightFood Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telkom and NightFood is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and NightFood Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NightFood Holdings 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 NightFood Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NightFood Holdings has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and NightFood Holdings go up and down completely randomly.
Pair Corralation between Telkom Indonesia and NightFood Holdings
Assuming the 90 days horizon Telkom Indonesia Tbk is expected to under-perform the NightFood Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 3.62 times less risky than NightFood Holdings. The pink sheet trades about -0.01 of its potential returns per unit of risk. The NightFood Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.79 in NightFood Holdings on September 2, 2024 and sell it today you would lose (0.63) from holding NightFood Holdings or give up 35.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.18% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. NightFood Holdings
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| NightFood Holdings |
Telkom Indonesia and NightFood Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and NightFood Holdings
The main advantage of trading using opposite Telkom Indonesia and NightFood Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, NightFood Holdings 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 NightFood Holdings will offset losses from the drop in NightFood Holdings' long position.| Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. Comcast Corp |
| NightFood Holdings vs. The A2 Milk | NightFood Holdings vs. Artisan Consumer Goods | NightFood Holdings vs. General Mills |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Directory Find actively traded commodities issued by global exchanges |