Correlation Between Amrica Mvil, and Telkom Indonesia

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

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

Diversification Opportunities for Amrica Mvil, and Telkom Indonesia

-0.04

Correlation Coefficient

Amrica Mvil,  Telkom Indonesia

Good diversification

The 3 months correlation between Amrica and Telkom is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Amrica Mvil, SAB 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 Amrica Mvil, 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 Amrica Mvil, SAB 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 Amrica Mvil, i.e., Amrica Mvil, and Telkom Indonesia go up and down completely randomly.

Pair Corralation between Amrica Mvil, and Telkom Indonesia

Assuming the 90 days horizon Amrica Mvil, SAB is expected to under-perform the Telkom Indonesia. In addition to that, Amrica Mvil, is 2.38 times more volatile than Telkom Indonesia Tbk. It trades about -0.02 of its total potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.04 per unit of volatility. If you would invest  18.00  in Telkom Indonesia Tbk on September 3, 2024 and sell it today you would earn a total of  1.00  from holding Telkom Indonesia Tbk or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amrica Mvil, SAB  vs.  Telkom Indonesia Tbk

Amrica Mvil, SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amrica Mvil, SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Telkom Indonesia Tbk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Telkom Indonesia Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Telkom Indonesia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amrica Mvil, and Telkom Indonesia

The main advantage of trading using opposite Amrica Mvil, and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amrica Mvil, 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 Amrica Mvil, SAB 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.