Correlation Between Telkom Indonesia and Powerbridge Technologies

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

Diversification Opportunities for Telkom Indonesia and Powerbridge Technologies

0.76

Correlation Coefficient

Telkom Indonesia  Powerbridge Technologies

Poor diversification

The 3 months correlation between Telkom and Powerbridge is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Powerbridge Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerbridge 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 Powerbridge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerbridge Technologies has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Powerbridge Technologies go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Powerbridge Technologies

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Powerbridge Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 60.78 times less risky than Powerbridge Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Powerbridge Technologies Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Powerbridge Technologies Co on September 25, 2024 and sell it today you would lose (300.00) from holding Powerbridge Technologies Co or give up 90.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	27.97%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Powerbridge Technologies Co

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.

Powerbridge Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powerbridge Technologies Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Powerbridge Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Telkom Indonesia and Powerbridge Technologies

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

The idea behind Telkom Indonesia Tbk and Powerbridge Technologies Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.