Correlation Between Telkom Indonesia and SimCorp AS

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

Diversification Opportunities for Telkom Indonesia and SimCorp AS

0.0

Correlation Coefficient

Telkom Indonesia  SimCorp AS

Pay attention - limited upside

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

Pair Corralation between Telkom Indonesia and SimCorp AS

If you would invest  0.00  in SimCorp AS on October 1, 2024 and sell it today you would earn a total of  0.00  from holding SimCorp AS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  SimCorp AS

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.

SimCorp AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SimCorp AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SimCorp AS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Telkom Indonesia and SimCorp AS

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

The idea behind Telkom Indonesia Tbk and SimCorp AS 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.