Correlation Between Telkom Indonesia and Ming Le

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

Diversification Opportunities for Telkom Indonesia and Ming Le

0.54

Correlation Coefficient

Telkom Indonesia  Ming Le

Very weak diversification

The 3 months correlation between Telkom and Ming is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Ming Le go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Ming Le

Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to generate 2.6 times more return on investment than Ming Le. However, Telkom Indonesia is 2.6 times more volatile than Ming Le Sports. It trades about 0.01 of its potential returns per unit of risk. Ming Le Sports is currently generating about -0.04 per unit of risk. If you would invest  15.00  in Telkom Indonesia Tbk on December 29, 2024 and sell it today you would lose (3.00) from holding Telkom Indonesia Tbk or give up 20.0% 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.  Ming Le Sports

Telkom Indonesia Tbk

Risk-Adjusted Performance

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 nearly stable forward indicators, Telkom Indonesia is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Ming Le Sports

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ming Le Sports has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Telkom Indonesia and Ming Le

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

The idea behind Telkom Indonesia Tbk and Ming Le Sports 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.