Correlation Between Telkom Indonesia and Careview Comm

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

Diversification Opportunities for Telkom Indonesia and Careview Comm

0.7

Correlation Coefficient

Telkom Indonesia  Careview Comm

Poor diversification

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

Pair Corralation between Telkom Indonesia and Careview Comm

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Careview Comm. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 6.07 times less risky than Careview Comm. The stock trades about 0.0 of its potential returns per unit of risk. The Careview Comm is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3.10  in Careview Comm on September 5, 2024 and sell it today you would earn a total of  0.28  from holding Careview Comm or generate 9.03% return on investment over 90 days.

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

Telkom Indonesia Tbk  vs.  Careview Comm

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 uncertain performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Careview Comm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Careview Comm has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Careview Comm is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Telkom Indonesia and Careview Comm

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

The idea behind Telkom Indonesia Tbk and Careview Comm 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.