Correlation Between Telkom Indonesia and PLAYTIKA HOLDING

Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on Telkom Indonesia and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and PLAYTIKA HOLDING.

Diversification Opportunities for Telkom Indonesia and PLAYTIKA HOLDING

-0.67

Correlation Coefficient

Telkom Indonesia  PLAYTIKA HOLDING

Excellent diversification

The 3 months correlation between Telkom and PLAYTIKA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYTIKA HOLDING has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between Telkom Indonesia and PLAYTIKA HOLDING

Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the PLAYTIKA HOLDING. In addition to that, Telkom Indonesia is 2.77 times more volatile than PLAYTIKA HOLDING DL 01. It trades about -0.02 of its total potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about 0.13 per unit of volatility. If you would invest  661.00  in PLAYTIKA HOLDING DL 01 on September 3, 2024 and sell it today you would earn a total of  119.00  from holding PLAYTIKA HOLDING DL 01 or generate 18.0% return on investment over 90 days.

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

Telkom Indonesia Tbk  vs.  PLAYTIKA HOLDING DL 01

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. Despite latest unsteady performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

PLAYTIKA HOLDING

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PLAYTIKA HOLDING DL 01 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PLAYTIKA HOLDING reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telkom Indonesia and PLAYTIKA HOLDING

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

The idea behind Telkom Indonesia Tbk and PLAYTIKA HOLDING DL 01 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.