Correlation Between Telia Company and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Telia Company and PT Sarana 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 Telia Company and PT Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telia Company AB and PT Sarana Menara, you can compare the effects of market volatilities on Telia Company and PT Sarana 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 Telia Company with a short position of PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telia Company and PT Sarana.
Diversification Opportunities for Telia Company and PT Sarana
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Telia and SMNUF is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Telia Company AB and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara and Telia Company 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 Telia Company AB are associated (or correlated) with PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Telia Company i.e., Telia Company and PT Sarana go up and down completely randomly.
Pair Corralation between Telia Company and PT Sarana
Assuming the 90 days horizon Telia Company AB is expected to generate 0.48 times more return on investment than PT Sarana. However, Telia Company AB is 2.08 times less risky than PT Sarana. It trades about 0.03 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.02 per unit of risk. If you would invest 272.00 in Telia Company AB on August 29, 2024 and sell it today you would earn a total of 38.00 from holding Telia Company AB or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 30.48% |
| Values | Daily Returns |
Telia Company AB vs. PT Sarana Menara
Performance |
| Timeline |
| Telia Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| PT Sarana Menara |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Telia Company and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telia Company and PT Sarana
The main advantage of trading using opposite Telia Company and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telia Company position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana's long position.| Telia Company vs. Lipocine | Telia Company vs. Live Ventures | Telia Company vs. Tscan Therapeutics | Telia Company vs. Franklin Street Properties |
| PT Sarana vs. Proximus NV ADR | PT Sarana vs. Singapore Telecommunications Limited | PT Sarana vs. Telstra Limited | PT Sarana vs. MTN Group Ltd |
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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