Correlation Between Telkom Indonesia and Evolv Technologies

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

Diversification Opportunities for Telkom Indonesia and Evolv Technologies

0.49

Correlation Coefficient

Telkom Indonesia  Evolv Technologies

Very weak diversification

The 3 months correlation between Telkom and Evolv is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Evolv Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolv Technologies 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 Evolv Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolv Technologies has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Evolv Technologies go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Evolv Technologies

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to generate 0.19 times more return on investment than Evolv Technologies. However, Telkom Indonesia Tbk is 5.15 times less risky than Evolv Technologies. It trades about -0.07 of its potential returns per unit of risk. Evolv Technologies Holdings is currently generating about -0.02 per unit of risk. If you would invest  1,643  in Telkom Indonesia Tbk on December 28, 2024 and sell it today you would lose (171.00) from holding Telkom Indonesia Tbk or give up 10.41% of portfolio value over 90 days.

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

Telkom Indonesia Tbk  vs.  Evolv Technologies Holdings

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 weak 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.

Evolv Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolv Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Telkom Indonesia and Evolv Technologies

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

The idea behind Telkom Indonesia Tbk and Evolv Technologies Holdings 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.