Correlation Between Telkom Indonesia and NEWELL RUBBERMAID

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

Diversification Opportunities for Telkom Indonesia and NEWELL RUBBERMAID

-0.53

Correlation Coefficient

Telkom Indonesia  NEWELL RUBBERMAID

Excellent diversification

The 3 months correlation between Telkom and NEWELL is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL RUBBERMAID has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and NEWELL RUBBERMAID go up and down completely randomly.

Pair Corralation between Telkom Indonesia and NEWELL RUBBERMAID

Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the NEWELL RUBBERMAID. In addition to that, Telkom Indonesia is 1.34 times more volatile than NEWELL RUBBERMAID . It trades about -0.06 of its total potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about 0.18 per unit of volatility. If you would invest  692.00  in NEWELL RUBBERMAID on September 23, 2024 and sell it today you would earn a total of  255.00  from holding NEWELL RUBBERMAID or generate 36.85% return on investment over 90 days.

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

Telkom Indonesia Tbk  vs.  NEWELL RUBBERMAID

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. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

NEWELL RUBBERMAID

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NEWELL RUBBERMAID are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, NEWELL RUBBERMAID unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telkom Indonesia and NEWELL RUBBERMAID

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

The idea behind Telkom Indonesia Tbk and NEWELL RUBBERMAID 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.