Correlation Between Telkom Indonesia and Priorityome Fund

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

Diversification Opportunities for Telkom Indonesia and Priorityome Fund

-0.34

Correlation Coefficient

Telkom Indonesia  Priorityome Fund

Very good diversification

The 3 months correlation between Telkom and Priorityome is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Priorityome Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Priorityome Fund 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 Priorityome Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Priorityome Fund has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Priorityome Fund go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Priorityome Fund

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Priorityome Fund. In addition to that, Telkom Indonesia is 2.04 times more volatile than Priorityome Fund. It trades about -0.11 of its total potential returns per unit of risk. Priorityome Fund is currently generating about 0.03 per unit of volatility. If you would invest  2,389  in Priorityome Fund on October 22, 2024 and sell it today you would earn a total of  42.00  from holding Priorityome Fund or generate 1.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Priorityome Fund

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

Priorityome Fund

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Priorityome Fund are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Priorityome Fund is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Telkom Indonesia and Priorityome Fund

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

The idea behind Telkom Indonesia Tbk and Priorityome Fund 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.

Check out your portfolio center.

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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .