Correlation Between Telkom Indonesia and Asian Pay

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

Diversification Opportunities for Telkom Indonesia and Asian Pay

-0.73

Correlation Coefficient

Telkom Indonesia  Asian Pay

Pay attention - limited upside

The 3 months correlation between Telkom and Asian is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Asian Pay Television in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Pay Television 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 Asian Pay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Pay Television has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Asian Pay go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Asian Pay

If you would invest  5.00  in Asian Pay Television on February 7, 2024 and sell it today you would earn a total of  0.00  from holding Asian Pay Television or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Asian Pay Television

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 weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Asian Pay Television

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Asian Pay Television are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Asian Pay reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telkom Indonesia and Asian Pay

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

The idea behind Telkom Indonesia Tbk and Asian Pay Television 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.