Correlation Between Telkom Indonesia and CIRCOR International

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

Diversification Opportunities for Telkom Indonesia and CIRCOR International

-0.77

Correlation Coefficient

Telkom Indonesia  CIRCOR International

Pay attention - limited upside

The 3 months correlation between Telkom and CIRCOR is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and CIRCOR International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIRCOR International 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 CIRCOR International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIRCOR International has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and CIRCOR International go up and down completely randomly.

Pair Corralation between Telkom Indonesia and CIRCOR International

If you would invest  5,585  in CIRCOR International on October 6, 2024 and sell it today you would earn a total of  0.00  from holding CIRCOR International 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.  CIRCOR International

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.

CIRCOR International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Telkom Indonesia and CIRCOR International

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

The idea behind Telkom Indonesia Tbk and CIRCOR International 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.