Correlation Between Telkom Indonesia and Liberty Media

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

Diversification Opportunities for Telkom Indonesia and Liberty Media

0.0

Correlation Coefficient

Telkom Indonesia  Liberty Media

Pay attention - limited upside

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

Pair Corralation between Telkom Indonesia and Liberty Media

If you would invest (100.00) in Liberty Media on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Liberty Media 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.  Liberty Media

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.

Liberty Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Liberty Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Liberty Media 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 Liberty Media

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

The idea behind Telkom Indonesia Tbk and Liberty Media 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.