Correlation Between Telkom Indonesia and Delivra Health

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

Diversification Opportunities for Telkom Indonesia and Delivra Health

0.7
  Correlation Coefficient

Poor diversification

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

Pair Corralation between Telkom Indonesia and Delivra Health

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to generate 0.39 times more return on investment than Delivra Health. However, Telkom Indonesia Tbk is 2.54 times less risky than Delivra Health. It trades about -0.04 of its potential returns per unit of risk. Delivra Health Brands is currently generating about -0.2 per unit of risk. If you would invest  1,632  in Telkom Indonesia Tbk on September 19, 2024 and sell it today you would lose (43.00) from holding Telkom Indonesia Tbk or give up 2.63% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Telkom Indonesia Tbk  vs.  Delivra Health Brands

 Performance 
       Timeline  
Telkom Indonesia Tbk 

Risk-Adjusted Performance

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Weak
 
Strong
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 uncertain performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Delivra Health Brands 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Delivra Health Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Telkom Indonesia and Delivra Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Telkom Indonesia and Delivra Health

The main advantage of trading using opposite Telkom Indonesia and Delivra Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Delivra Health 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 Delivra Health will offset losses from the drop in Delivra Health's long position.
The idea behind Telkom Indonesia Tbk and Delivra Health Brands 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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