Correlation Between TPG Telecom and PT Sarana

Can any of the company-specific risk be diversified away by investing in both TPG Telecom and PT Sarana 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 TPG Telecom and PT Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TPG Telecom Limited and PT Sarana Menara, you can compare the effects of market volatilities on TPG Telecom and PT Sarana 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 TPG Telecom with a short position of PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG Telecom and PT Sarana.

Diversification Opportunities for TPG Telecom and PT Sarana

0.0

Correlation Coefficient

TPG Telecom  PT Sarana

Pay attention - limited upside

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

Pair Corralation between TPG Telecom and PT Sarana

If you would invest (100.00) in PT Sarana Menara on December 28, 2024 and sell it today you would earn a total of  100.00  from holding PT Sarana Menara or generate -100.0% return on investment over 90 days.

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

TPG Telecom Limited  vs.  PT Sarana Menara

TPG Telecom Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPG Telecom Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PT Sarana Menara

Risk-Adjusted Performance

Very Weak

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

Pair Trading with TPG Telecom and PT Sarana

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

The idea behind TPG Telecom Limited and PT Sarana Menara 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.