Correlation Between Telkom Indonesia and Alset Capital

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

Diversification Opportunities for Telkom Indonesia and Alset Capital

-0.65

Correlation Coefficient

Telkom Indonesia  Alset Capital

Excellent diversification

The 3 months correlation between Telkom and Alset is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Alset Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alset Capital Acquisition 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 Alset Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alset Capital Acquisition has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Alset Capital go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Alset Capital

If you would invest  37.00  in Alset Capital Acquisition on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Alset Capital Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Alset Capital Acquisition

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. Despite latest conflicting performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Alset Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alset Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Alset Capital is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Telkom Indonesia and Alset Capital

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

The idea behind Telkom Indonesia Tbk and Alset Capital Acquisition 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.