Correlation Between Telkom Indonesia and DHCA Old

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

Diversification Opportunities for Telkom Indonesia and DHCA Old

0.0

Correlation Coefficient

Telkom Indonesia  DHCA Old

Pay attention - limited upside

The 3 months correlation between Telkom and DHCA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and DHCA Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHCA Old 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 DHCA Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHCA Old has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and DHCA Old go up and down completely randomly.

Pair Corralation between Telkom Indonesia and DHCA Old

If you would invest (100.00) in DHCA Old on December 18, 2024 and sell it today you would earn a total of  100.00  from holding DHCA Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  DHCA Old

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 quite persistent essential indicators, Telkom Indonesia is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

DHCA Old

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Telkom Indonesia and DHCA Old

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

The idea behind Telkom Indonesia Tbk and DHCA Old 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.