Correlation Between CONCORDIA FINL and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both CONCORDIA FINL and Telkom Indonesia 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 CONCORDIA FINL and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONCORDIA FINL GROUP and Telkom Indonesia Tbk, you can compare the effects of market volatilities on CONCORDIA FINL and Telkom Indonesia 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 CONCORDIA FINL with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONCORDIA FINL and Telkom Indonesia.
Diversification Opportunities for CONCORDIA FINL and Telkom Indonesia
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CONCORDIA and Telkom is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CONCORDIA FINL GROUP and Telkom Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telkom Indonesia Tbk and CONCORDIA FINL 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 CONCORDIA FINL GROUP are associated (or correlated) with Telkom Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telkom Indonesia Tbk has no effect on the direction of CONCORDIA FINL i.e., CONCORDIA FINL and Telkom Indonesia go up and down completely randomly.
Pair Corralation between CONCORDIA FINL and Telkom Indonesia
Assuming the 90 days horizon CONCORDIA FINL GROUP is expected to generate 0.29 times more return on investment than Telkom Indonesia. However, CONCORDIA FINL GROUP is 3.41 times less risky than Telkom Indonesia. It trades about 0.07 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about -0.01 per unit of risk. If you would invest 484.00 in CONCORDIA FINL GROUP on October 31, 2024 and sell it today you would earn a total of 51.00 from holding CONCORDIA FINL GROUP or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONCORDIA FINL GROUP vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| CONCORDIA FINL GROUP |
| Telkom Indonesia Tbk |
CONCORDIA FINL and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONCORDIA FINL and Telkom Indonesia
The main advantage of trading using opposite CONCORDIA FINL and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONCORDIA FINL position performs unexpectedly, Telkom Indonesia 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 Telkom Indonesia will offset losses from the drop in Telkom Indonesia's long position.| CONCORDIA FINL vs. STRAYER EDUCATION | CONCORDIA FINL vs. QINGCI GAMES INC | CONCORDIA FINL vs. IDP EDUCATION LTD | CONCORDIA FINL vs. DeVry Education Group |
| Telkom Indonesia vs. FIREWEED METALS P | Telkom Indonesia vs. Zijin Mining Group | Telkom Indonesia vs. Commercial Vehicle Group | Telkom Indonesia vs. GALENA MINING 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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