Correlation Between Austevoll Seafood and Telkom Indonesia

Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Telkom Indonesia 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 Austevoll Seafood and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Austevoll Seafood ASA and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Austevoll Seafood and Telkom Indonesia 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 Austevoll Seafood with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Telkom Indonesia.

Diversification Opportunities for Austevoll Seafood and Telkom Indonesia

0.05

Correlation Coefficient

Austevoll Seafood  Telkom Indonesia

Significant diversification

The 3 months correlation between Austevoll and Telkom is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Telkom Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telkom Indonesia Tbk and Austevoll Seafood 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 Austevoll Seafood ASA are associated (or correlated) with Telkom Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telkom Indonesia Tbk has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Telkom Indonesia go up and down completely randomly.

Pair Corralation between Austevoll Seafood and Telkom Indonesia

Assuming the 90 days horizon Austevoll Seafood ASA is expected to generate 0.44 times more return on investment than Telkom Indonesia. However, Austevoll Seafood ASA is 2.25 times less risky than Telkom Indonesia. It trades about 0.26 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.03 per unit of risk. If you would invest  819.00  in Austevoll Seafood ASA on October 26, 2024 and sell it today you would earn a total of  97.00  from holding Austevoll Seafood ASA or generate 11.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Austevoll Seafood ASA  vs.  Telkom Indonesia Tbk

Austevoll Seafood ASA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Austevoll Seafood ASA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Austevoll Seafood may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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. In spite of comparatively stable basic indicators, Telkom Indonesia is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Austevoll Seafood and Telkom Indonesia

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

The idea behind Austevoll Seafood ASA and Telkom Indonesia Tbk 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.