Correlation Between Telkom Indonesia and Strauss

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

Diversification Opportunities for Telkom Indonesia and Strauss

0.0

Correlation Coefficient

Telkom Indonesia  Strauss

Pay attention - limited upside

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

Pair Corralation between Telkom Indonesia and Strauss

If you would invest  15.00  in Telkom Indonesia Tbk on December 29, 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	71.05%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Strauss Group

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.

Strauss Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Telkom Indonesia and Strauss

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

The idea behind Telkom Indonesia Tbk and Strauss Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.