Correlation Between Telkom Indonesia and HelloFresh

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

Diversification Opportunities for Telkom Indonesia and HelloFresh

-0.66

Correlation Coefficient

Telkom Indonesia  HelloFresh

Excellent diversification

The 3 months correlation between Telkom and HelloFresh is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and HelloFresh SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HelloFresh SE 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 HelloFresh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HelloFresh SE has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and HelloFresh go up and down completely randomly.

Pair Corralation between Telkom Indonesia and HelloFresh

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the HelloFresh. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 3.47 times less risky than HelloFresh. The stock trades about -0.04 of its potential returns per unit of risk. The HelloFresh SE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  600.00  in HelloFresh SE on September 30, 2024 and sell it today you would earn a total of  689.00  from holding HelloFresh SE or generate 114.83% return on investment over 90 days.

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

Telkom Indonesia Tbk  vs.  HelloFresh SE

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 weak performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

HelloFresh SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HelloFresh SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, HelloFresh reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telkom Indonesia and HelloFresh

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

The idea behind Telkom Indonesia Tbk and HelloFresh SE 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.