Correlation Between Telkom Indonesia and Protect Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Protect Pharmaceutical 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 Protect Pharmaceutical 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 Protect Pharmaceutical, you can compare the effects of market volatilities on Telkom Indonesia and Protect Pharmaceutical 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 Protect Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Protect Pharmaceutical.
Diversification Opportunities for Telkom Indonesia and Protect Pharmaceutical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Protect is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Protect Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protect Pharmaceutical 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 Protect Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protect Pharmaceutical has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Protect Pharmaceutical go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Protect Pharmaceutical
Assuming the 90 days horizon Telkom Indonesia Tbk is expected to generate 0.65 times more return on investment than Protect Pharmaceutical. However, Telkom Indonesia Tbk is 1.55 times less risky than Protect Pharmaceutical. It trades about 0.07 of its potential returns per unit of risk. Protect Pharmaceutical is currently generating about -0.07 per unit of risk. If you would invest 18.00 in Telkom Indonesia Tbk on September 1, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Protect Pharmaceutical
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Protect Pharmaceutical |
Telkom Indonesia and Protect Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Protect Pharmaceutical
The main advantage of trading using opposite Telkom Indonesia and Protect Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Protect Pharmaceutical 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 Protect Pharmaceutical will offset losses from the drop in Protect Pharmaceutical's long position.| Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. Comcast Corp |
| Protect Pharmaceutical vs. Brainsway | Protect Pharmaceutical vs. Venus Concept | Protect Pharmaceutical vs. Tactile Systems Technology | Protect Pharmaceutical vs. Icecure Medical |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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