Correlation Between Telkom Indonesia and Qwest Corp

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

Diversification Opportunities for Telkom Indonesia and Qwest Corp

-0.76

Correlation Coefficient

Telkom Indonesia  Qwest Corp

Pay attention - limited upside

The 3 months correlation between Telkom and Qwest is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Qwest Corp NT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qwest Corp NT 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 Qwest Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qwest Corp NT has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Qwest Corp go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Qwest Corp

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Qwest Corp. In addition to that, Telkom Indonesia is 1.96 times more volatile than Qwest Corp NT. It trades about -0.07 of its total potential returns per unit of risk. Qwest Corp NT is currently generating about 0.0 per unit of volatility. If you would invest  1,712  in Qwest Corp NT on December 27, 2024 and sell it today you would lose (5.00) from holding Qwest Corp NT or give up 0.29% of portfolio value over 90 days.

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

Telkom Indonesia Tbk  vs.  Qwest Corp NT

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 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.

Qwest Corp NT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qwest Corp NT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Qwest Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Telkom Indonesia and Qwest Corp

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

The idea behind Telkom Indonesia Tbk and Qwest Corp NT 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.