Correlation Between Zeder Investments and Telkom

Can any of the company-specific risk be diversified away by investing in both Zeder Investments and Telkom 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 Zeder Investments and Telkom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zeder Investments and Telkom, you can compare the effects of market volatilities on Zeder Investments and Telkom 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 Zeder Investments with a short position of Telkom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zeder Investments and Telkom.

Diversification Opportunities for Zeder Investments and Telkom

-0.82

Correlation Coefficient

Zeder Investments  Telkom

Pay attention - limited upside

The 3 months correlation between Zeder and Telkom is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Zeder Investments and Telkom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telkom and Zeder Investments 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 Zeder Investments are associated (or correlated) with Telkom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telkom has no effect on the direction of Zeder Investments i.e., Zeder Investments and Telkom go up and down completely randomly.

Pair Corralation between Zeder Investments and Telkom

Assuming the 90 days trading horizon Zeder Investments is expected to under-perform the Telkom. In addition to that, Zeder Investments is 1.18 times more volatile than Telkom. It trades about -0.12 of its total potential returns per unit of risk. Telkom is currently generating about 0.46 per unit of volatility. If you would invest  271,900  in Telkom on September 5, 2024 and sell it today you would earn a total of  67,900  from holding Telkom or generate 24.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Zeder Investments  vs.  Telkom

Zeder Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zeder Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Telkom

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Telkom are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Telkom exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zeder Investments and Telkom

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

The idea behind Zeder Investments and Telkom 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.