Correlation Between Telkom Indonesia and Komatsu
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Komatsu 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 Komatsu 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 Komatsu, you can compare the effects of market volatilities on Telkom Indonesia and Komatsu 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 Komatsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Komatsu.
Diversification Opportunities for Telkom Indonesia and Komatsu
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Komatsu is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Komatsu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komatsu 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 Komatsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komatsu has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Komatsu go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Komatsu
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Komatsu. In addition to that, Telkom Indonesia is 4.0 times more volatile than Komatsu. It trades about -0.01 of its total potential returns per unit of risk. Komatsu is currently generating about 0.1 per unit of volatility. If you would invest 2,516 in Komatsu on September 12, 2024 and sell it today you would earn a total of 84.00 from holding Komatsu or generate 3.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Telkom Indonesia Tbk vs. Komatsu
Performance |
Timeline |
Telkom Indonesia Tbk |
Komatsu |
Telkom Indonesia and Komatsu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telkom Indonesia and Komatsu
The main advantage of trading using opposite Telkom Indonesia and Komatsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Komatsu 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 Komatsu will offset losses from the drop in Komatsu's long position.Telkom Indonesia vs. Singapore Telecommunications Limited | Telkom Indonesia vs. Ribbon Communications | Telkom Indonesia vs. Tower Semiconductor | Telkom Indonesia vs. Spirent Communications plc |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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