Correlation Between Telkom Indonesia and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Telkom Indonesia and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Samsung Electronics.
Diversification Opportunities for Telkom Indonesia and Samsung Electronics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telkom and Samsung is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Samsung Electronics go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Samsung Electronics
Assuming the 90 days horizon Telkom Indonesia Tbk is expected to under-perform the Samsung Electronics. In addition to that, Telkom Indonesia is 56.55 times more volatile than Samsung Electronics Co. It trades about -0.03 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.1 per unit of volatility. If you would invest 4,007 in Samsung Electronics Co on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Samsung Electronics Co or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.17% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Samsung Electronics Co
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Samsung Electronics |
Telkom Indonesia and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Samsung Electronics
The main advantage of trading using opposite Telkom Indonesia and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Telkom Indonesia vs. Verizon Communications | Telkom Indonesia vs. ATT Inc | Telkom Indonesia vs. Comcast Corp |
| Samsung Electronics vs. Universal Electronics | Samsung Electronics vs. Vizio Holding Corp | Samsung Electronics vs. VOXX International | Samsung Electronics vs. Sony Group Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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