Correlation Between Telkom Indonesia and EyecityCom

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

Diversification Opportunities for Telkom Indonesia and EyecityCom

-0.82

Correlation Coefficient

Telkom Indonesia  EyecityCom

Pay attention - limited upside

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

Pair Corralation between Telkom Indonesia and EyecityCom

Considering the 90-day investment horizon Telkom Indonesia is expected to generate 3.24 times less return on investment than EyecityCom. But when comparing it to its historical volatility, Telkom Indonesia Tbk is 12.19 times less risky than EyecityCom. It trades about 0.18 of its potential returns per unit of risk. EyecityCom is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.05  in EyecityCom on May 5, 2025 and sell it today you would lose (0.02) from holding EyecityCom or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  EyecityCom

Telkom Indonesia Tbk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telkom Indonesia Tbk are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, Telkom Indonesia disclosed solid returns over the last few months and may actually be approaching a breakup point.

EyecityCom

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EyecityCom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, EyecityCom showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telkom Indonesia and EyecityCom

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

The idea behind Telkom Indonesia Tbk and EyecityCom 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.