Correlation Between Telkom Indonesia and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Endeavour Mining 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 Endeavour Mining 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 Endeavour Mining Corp, you can compare the effects of market volatilities on Telkom Indonesia and Endeavour Mining 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 Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Endeavour Mining.
Diversification Opportunities for Telkom Indonesia and Endeavour Mining
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telkom and Endeavour is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp 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 Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Endeavour Mining go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Endeavour Mining
Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Endeavour Mining. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.6 times less risky than Endeavour Mining. The stock trades about -0.52 of its potential returns per unit of risk. The Endeavour Mining Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,084 in Endeavour Mining Corp on January 30, 2024 and sell it today you would earn a total of 48.00 from holding Endeavour Mining Corp or generate 2.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Telkom Indonesia Tbk vs. Endeavour Mining Corp
Performance |
Timeline |
Telkom Indonesia Tbk |
Endeavour Mining Corp |
Telkom Indonesia and Endeavour Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Telkom Indonesia and Endeavour Mining
The main advantage of trading using opposite Telkom Indonesia and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Endeavour Mining 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 Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.Telkom Indonesia vs. Liberty Broadband Srs | Telkom Indonesia vs. Cable One | Telkom Indonesia vs. Liberty Broadband Corp | Telkom Indonesia vs. Liberty Global PLC |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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