Correlation Between Telkom Indonesia and Probe Metals

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

Diversification Opportunities for Telkom Indonesia and Probe Metals

0.76

Correlation Coefficient

Telkom Indonesia  Probe Metals

Poor diversification

The 3 months correlation between Telkom and Probe is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Probe Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Probe Metals 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 Probe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Probe Metals has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Probe Metals go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Probe Metals

Considering the 90-day investment horizon Telkom Indonesia is expected to generate 2.2 times less return on investment than Probe Metals. But when comparing it to its historical volatility, Telkom Indonesia Tbk is 2.67 times less risky than Probe Metals. It trades about 0.1 of its potential returns per unit of risk. Probe Metals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  214.00  in Probe Metals on September 30, 2025 and sell it today you would earn a total of  51.00  from holding Probe Metals or generate 23.83% return on investment over 90 days.

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

Telkom Indonesia Tbk  vs.  Probe Metals

Telkom Indonesia Tbk

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Telkom Indonesia Tbk are ranked lower than 8 (%) 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.

Probe Metals

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Probe Metals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Probe Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telkom Indonesia and Probe Metals

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

The idea behind Telkom Indonesia Tbk and Probe Metals 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..