Correlation Between Telkom Indonesia and Neptune Digital

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

Diversification Opportunities for Telkom Indonesia and Neptune Digital

-0.74

Correlation Coefficient

Telkom Indonesia  Neptune Digital

Pay attention - limited upside

The 3 months correlation between Telkom and Neptune is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Neptune Digital Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neptune Digital Assets 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 Neptune Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neptune Digital Assets has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Neptune Digital go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Neptune Digital

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Neptune Digital. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 5.1 times less risky than Neptune Digital. The stock trades about -0.01 of its potential returns per unit of risk. The Neptune Digital Assets is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Neptune Digital Assets on May 6, 2025 and sell it today you would earn a total of  68.00  from holding Neptune Digital Assets or generate 340.0% return on investment over 90 days.

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

Telkom Indonesia Tbk  vs.  Neptune Digital Assets

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 15 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Telkom Indonesia disclosed solid returns over the last few months and may actually be approaching a breakup point.

Neptune Digital Assets

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neptune Digital Assets has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Telkom Indonesia and Neptune Digital

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

The idea behind Telkom Indonesia Tbk and Neptune Digital Assets 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.