Correlation Between Telkom Indonesia and Dine Brands

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

Diversification Opportunities for Telkom Indonesia and Dine Brands

0.69

Correlation Coefficient

Telkom Indonesia  Dine Brands

Poor diversification

The 3 months correlation between Telkom and Dine is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Dine Brands go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Dine Brands

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to generate 0.8 times more return on investment than Dine Brands. However, Telkom Indonesia Tbk is 1.25 times less risky than Dine Brands. It trades about -0.08 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.09 per unit of risk. If you would invest  1,659  in Telkom Indonesia Tbk on December 27, 2024 and sell it today you would lose (193.00) from holding Telkom Indonesia Tbk or give up 11.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Dine Brands Global

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.

Dine Brands Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dine Brands Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Telkom Indonesia and Dine Brands

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

The idea behind Telkom Indonesia Tbk and Dine Brands Global 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .