Correlation Between Telkom Indonesia and Goodness Growth
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Goodness Growth 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 Goodness Growth 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 Goodness Growth Holdings, you can compare the effects of market volatilities on Telkom Indonesia and Goodness Growth 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 Goodness Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Goodness Growth.
Diversification Opportunities for Telkom Indonesia and Goodness Growth
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telkom and Goodness is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Goodness Growth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodness Growth Holdings 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 Goodness Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodness Growth Holdings has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Goodness Growth go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Goodness Growth
Assuming the 90 days horizon Telkom Indonesia Tbk is expected to under-perform the Goodness Growth. But the pink sheet apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 6.9 times less risky than Goodness Growth. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Goodness Growth Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Goodness Growth Holdings on December 4, 2024 and sell it today you would earn a total of 7.00 from holding Goodness Growth Holdings or generate 20.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 47.46% |
Values | Daily Returns |
Telkom Indonesia Tbk vs. Goodness Growth Holdings
Performance |
Timeline |
Telkom Indonesia Tbk |
Goodness Growth Holdings |
Telkom Indonesia and Goodness Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telkom Indonesia and Goodness Growth
The main advantage of trading using opposite Telkom Indonesia and Goodness Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Goodness Growth 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 Goodness Growth will offset losses from the drop in Goodness Growth's long position.Telkom Indonesia vs. Access Power Co | Telkom Indonesia vs. Nw Tech Capital | Telkom Indonesia vs. Radcom | Telkom Indonesia vs. FingerMotion |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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