Correlation Between Telkom Indonesia and SILVER BULLET

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

Diversification Opportunities for Telkom Indonesia and SILVER BULLET

0.51

Correlation Coefficient

Telkom Indonesia  SILVER BULLET

Very weak diversification

The 3 months correlation between Telkom and SILVER is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and SILVER BULLET DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILVER BULLET DATA 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 SILVER BULLET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILVER BULLET DATA has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and SILVER BULLET go up and down completely randomly.

Pair Corralation between Telkom Indonesia and SILVER BULLET

Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 3.5 times more return on investment than SILVER BULLET. However, Telkom Indonesia is 3.5 times more volatile than SILVER BULLET DATA. It trades about 0.02 of its potential returns per unit of risk. SILVER BULLET DATA is currently generating about -0.28 per unit of risk. If you would invest  16.00  in Telkom Indonesia Tbk on December 20, 2024 and sell it today you would lose (2.00) from holding Telkom Indonesia Tbk or give up 12.5% of portfolio value over 90 days.

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

Telkom Indonesia Tbk  vs.  SILVER BULLET DATA

Telkom Indonesia Tbk

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Telkom Indonesia Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Telkom Indonesia may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SILVER BULLET DATA

Risk-Adjusted Performance

Very Weak

Over the last 90 days SILVER BULLET DATA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Telkom Indonesia and SILVER BULLET

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

The idea behind Telkom Indonesia Tbk and SILVER BULLET DATA 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.