Correlation Between Telkom Indonesia and Ladenburg Thalmann

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

Diversification Opportunities for Telkom Indonesia and Ladenburg Thalmann

-0.51

Correlation Coefficient

Telkom Indonesia  Ladenburg Thalmann

Excellent diversification

The 3 months correlation between Telkom and Ladenburg is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann 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 Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Ladenburg Thalmann go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Ladenburg Thalmann

If you would invest  16.00  in Telkom Indonesia Tbk on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Telkom Indonesia Tbk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Ladenburg Thalmann Financial

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 latest fragile performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ladenburg Thalmann

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladenburg Thalmann Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ladenburg Thalmann is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Telkom Indonesia and Ladenburg Thalmann

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

The idea behind Telkom Indonesia Tbk and Ladenburg Thalmann Financial 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..