Correlation Between Telkom Indonesia and TYSON FOODS

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

Diversification Opportunities for Telkom Indonesia and TYSON FOODS

-0.4

Correlation Coefficient

Telkom Indonesia  TYSON FOODS

Very good diversification

The 3 months correlation between Telkom and TYSON is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and TYSON FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TYSON FOODS A 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 TYSON FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TYSON FOODS A has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and TYSON FOODS go up and down completely randomly.

Pair Corralation between Telkom Indonesia and TYSON FOODS

Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the TYSON FOODS. In addition to that, Telkom Indonesia is 3.54 times more volatile than TYSON FOODS A . It trades about -0.02 of its total potential returns per unit of risk. TYSON FOODS A is currently generating about 0.05 per unit of volatility. If you would invest  5,752  in TYSON FOODS A on September 3, 2024 and sell it today you would earn a total of  278.00  from holding TYSON FOODS A or generate 4.83% return on investment over 90 days.

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

Telkom Indonesia Tbk  vs.  TYSON FOODS A

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.

TYSON FOODS A

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TYSON FOODS A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, TYSON FOODS is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Telkom Indonesia and TYSON FOODS

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

The idea behind Telkom Indonesia Tbk and TYSON FOODS A 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.