Correlation Between Telkom Indonesia and Lindblad Expeditions

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

Diversification Opportunities for Telkom Indonesia and Lindblad Expeditions

-0.7

Correlation Coefficient

Telkom Indonesia  Lindblad Expeditions

Excellent diversification

The 3 months correlation between Telkom and Lindblad is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Lindblad Expeditions Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindblad Expeditions 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 Lindblad Expeditions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindblad Expeditions has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Lindblad Expeditions go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Lindblad Expeditions

Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Lindblad Expeditions. In addition to that, Telkom Indonesia is 1.04 times more volatile than Lindblad Expeditions Holdings. It trades about -0.02 of its total potential returns per unit of risk. Lindblad Expeditions Holdings is currently generating about 0.1 per unit of volatility. If you would invest  880.00  in Lindblad Expeditions Holdings on September 3, 2024 and sell it today you would earn a total of  300.00  from holding Lindblad Expeditions Holdings or generate 34.09% return on investment over 90 days.

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

Telkom Indonesia Tbk  vs.  Lindblad Expeditions Holdings

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. Despite latest unsteady performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Lindblad Expeditions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindblad Expeditions Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Lindblad Expeditions reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telkom Indonesia and Lindblad Expeditions

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

The idea behind Telkom Indonesia Tbk and Lindblad Expeditions Holdings 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.