Correlation Between Telkom Indonesia and Marathon Gold

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

Diversification Opportunities for Telkom Indonesia and Marathon Gold

0.0

Correlation Coefficient

Telkom Indonesia  Marathon Gold

Pay attention - limited upside

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

Pair Corralation between Telkom Indonesia and Marathon Gold

If you would invest  15.00  in Telkom Indonesia Tbk on December 30, 2024 and sell it today you would earn a total of  1.00  from holding Telkom Indonesia Tbk or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Marathon Gold

Telkom Indonesia Tbk

Risk-Adjusted Performance

Good

Over the last 90 days Telkom Indonesia Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, Telkom Indonesia reported solid returns over the last few months and may actually be approaching a breakup point.

Marathon Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marathon Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Marathon Gold 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 Marathon Gold

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

The idea behind Telkom Indonesia Tbk and Marathon Gold 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.