Correlation Between Telkom Indonesia and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Compagnie Plastic 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 Compagnie Plastic 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 Compagnie Plastic Omnium, you can compare the effects of market volatilities on Telkom Indonesia and Compagnie Plastic 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 Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Compagnie Plastic.
Diversification Opportunities for Telkom Indonesia and Compagnie Plastic
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Compagnie is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium 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 Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Compagnie Plastic
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Compagnie Plastic. In addition to that, Telkom Indonesia is 2.49 times more volatile than Compagnie Plastic Omnium. It trades about -0.03 of its total potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about 0.36 per unit of volatility. If you would invest 814.00 in Compagnie Plastic Omnium on September 23, 2024 and sell it today you would earn a total of 158.00 from holding Compagnie Plastic Omnium or generate 19.41% 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. Compagnie Plastic Omnium
Performance |
Timeline |
Telkom Indonesia Tbk |
Compagnie Plastic Omnium |
Telkom Indonesia and Compagnie Plastic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telkom Indonesia and Compagnie Plastic
The main advantage of trading using opposite Telkom Indonesia and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.Telkom Indonesia vs. APPLIED MATERIALS | Telkom Indonesia vs. QBE Insurance Group | Telkom Indonesia vs. LIFENET INSURANCE CO | Telkom Indonesia vs. Compagnie Plastic Omnium |
Compagnie Plastic vs. Dno ASA | Compagnie Plastic vs. DENSO P ADR | Compagnie Plastic vs. Aptiv PLC | Compagnie Plastic vs. PT Astra International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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