Correlation Between Telkom Indonesia and CBD Global

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

Diversification Opportunities for Telkom Indonesia and CBD Global

-0.42

Correlation Coefficient

Telkom Indonesia  CBD Global

Very good diversification

The 3 months correlation between Telkom and CBD is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and CBD Global Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBD Global Sciences 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 CBD Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBD Global Sciences has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and CBD Global go up and down completely randomly.

Pair Corralation between Telkom Indonesia and CBD Global

If you would invest  16.00  in Telkom Indonesia Tbk on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Telkom Indonesia Tbk or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  CBD Global Sciences

Telkom Indonesia Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Telkom Indonesia Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Telkom Indonesia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CBD Global Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBD Global Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CBD Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Telkom Indonesia and CBD Global

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

The idea behind Telkom Indonesia Tbk and CBD Global Sciences 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.