Correlation Between Telkom Indonesia and DIVIDEND GROWTH

Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and DIVIDEND GROWTH 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 DIVIDEND GROWTH 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 DIVIDEND GROWTH SPLIT, you can compare the effects of market volatilities on Telkom Indonesia and DIVIDEND GROWTH 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 DIVIDEND GROWTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and DIVIDEND GROWTH.

Diversification Opportunities for Telkom Indonesia and DIVIDEND GROWTH

-0.52

Correlation Coefficient

Telkom Indonesia  DIVIDEND GROWTH

Excellent diversification

The 3 months correlation between Telkom and DIVIDEND is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and DIVIDEND GROWTH SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIVIDEND GROWTH SPLIT 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 DIVIDEND GROWTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIVIDEND GROWTH SPLIT has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and DIVIDEND GROWTH go up and down completely randomly.

Pair Corralation between Telkom Indonesia and DIVIDEND GROWTH

Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the DIVIDEND GROWTH. In addition to that, Telkom Indonesia is 1.11 times more volatile than DIVIDEND GROWTH SPLIT. It trades about -0.01 of its total potential returns per unit of risk. DIVIDEND GROWTH SPLIT is currently generating about 0.04 per unit of volatility. If you would invest  321.00  in DIVIDEND GROWTH SPLIT on September 28, 2024 and sell it today you would earn a total of  123.00  from holding DIVIDEND GROWTH SPLIT or generate 38.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  DIVIDEND GROWTH SPLIT

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 uncertain 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.

DIVIDEND GROWTH SPLIT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DIVIDEND GROWTH SPLIT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DIVIDEND GROWTH may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Telkom Indonesia and DIVIDEND GROWTH

The main advantage of trading using opposite Telkom Indonesia and DIVIDEND GROWTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, DIVIDEND GROWTH 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 DIVIDEND GROWTH will offset losses from the drop in DIVIDEND GROWTH's long position.

The idea behind Telkom Indonesia Tbk and DIVIDEND GROWTH SPLIT 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.