Correlation Between Telkom Indonesia and CALTAGIRONE EDITORE

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

Diversification Opportunities for Telkom Indonesia and CALTAGIRONE EDITORE

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Telkom and CALTAGIRONE is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and CALTAGIRONE EDITORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CALTAGIRONE EDITORE has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and CALTAGIRONE EDITORE go up and down completely randomly.

Pair Corralation between Telkom Indonesia and CALTAGIRONE EDITORE

Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 5.56 times more return on investment than CALTAGIRONE EDITORE. However, Telkom Indonesia is 5.56 times more volatile than CALTAGIRONE EDITORE. It trades about 0.05 of its potential returns per unit of risk. CALTAGIRONE EDITORE is currently generating about -0.06 per unit of risk. If you would invest  15.00  in Telkom Indonesia Tbk on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Telkom Indonesia Tbk or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Telkom Indonesia Tbk  vs.  CALTAGIRONE EDITORE

 Performance 
       Timeline  
Telkom Indonesia Tbk 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Telkom Indonesia Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, Telkom Indonesia reported solid returns over the last few months and may actually be approaching a breakup point.
CALTAGIRONE EDITORE 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CALTAGIRONE EDITORE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CALTAGIRONE EDITORE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Telkom Indonesia and CALTAGIRONE EDITORE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Telkom Indonesia and CALTAGIRONE EDITORE

The main advantage of trading using opposite Telkom Indonesia and CALTAGIRONE EDITORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, CALTAGIRONE EDITORE 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 CALTAGIRONE EDITORE will offset losses from the drop in CALTAGIRONE EDITORE's long position.
The idea behind Telkom Indonesia Tbk and CALTAGIRONE EDITORE 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 CEOs Directory module to screen CEOs from public companies around the world.

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