Correlation Between Khiron Life and Telkom Indonesia

Can any of the company-specific risk be diversified away by investing in both Khiron Life 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 Khiron Life and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Khiron Life Sciences and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Khiron Life 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 Khiron Life with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and Telkom Indonesia.

Diversification Opportunities for Khiron Life and Telkom Indonesia

0.0

Correlation Coefficient

Khiron Life  Telkom Indonesia

Pay attention - limited upside

The 3 months correlation between Khiron and Telkom is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences 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 Khiron Life 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 Khiron Life Sciences 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 Khiron Life i.e., Khiron Life and Telkom Indonesia go up and down completely randomly.

Pair Corralation between Khiron Life and Telkom Indonesia

If you would invest  15.00  in Telkom Indonesia Tbk on September 23, 2024 and sell it today you would lose (1.00) from holding Telkom Indonesia Tbk or give up 6.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.23%
Values	Daily Returns

Khiron Life Sciences  vs.  Telkom Indonesia Tbk

Khiron Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Khiron Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Khiron Life is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Telkom Indonesia Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telkom Indonesia Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Khiron Life and Telkom Indonesia

The main advantage of trading using opposite Khiron Life and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khiron Life 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.

The idea behind Khiron Life Sciences and Telkom Indonesia Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.