Correlation Between Telkom Indonesia and Micropac Industries

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

Diversification Opportunities for Telkom Indonesia and Micropac Industries

0.0

Correlation Coefficient

Telkom Indonesia  Micropac Industries

Pay attention - limited upside

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

Pair Corralation between Telkom Indonesia and Micropac Industries

If you would invest (100.00) in Micropac Industries on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Micropac Industries 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.  Micropac Industries

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

Micropac Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Micropac Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Micropac Industries is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Telkom Indonesia and Micropac Industries

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

The idea behind Telkom Indonesia Tbk and Micropac Industries 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.