Correlation Between Telkom Indonesia and Sandy Spring

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

Diversification Opportunities for Telkom Indonesia and Sandy Spring

-0.56

Correlation Coefficient

Telkom Indonesia  Sandy Spring

Excellent diversification

The 3 months correlation between Telkom and Sandy is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Sandy Spring Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandy Spring Bancorp 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 Sandy Spring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandy Spring Bancorp has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Sandy Spring go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Sandy Spring

If you would invest  1,502  in Telkom Indonesia Tbk on May 4, 2025 and sell it today you would earn a total of  282.00  from holding Telkom Indonesia Tbk or generate 18.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Sandy Spring Bancorp

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.

Sandy Spring Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sandy Spring Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Sandy Spring is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Telkom Indonesia and Sandy Spring

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

The idea behind Telkom Indonesia Tbk and Sandy Spring Bancorp 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 CEOs Directory module to screen CEOs from public companies around the world.