Correlation Between Telkom Indonesia and ATAI Life

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

Diversification Opportunities for Telkom Indonesia and ATAI Life

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Telkom and ATAI Life is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and ATAI Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATAI Life Sciences 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 ATAI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATAI Life Sciences has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and ATAI Life go up and down completely randomly.

Pair Corralation between Telkom Indonesia and ATAI Life

If you would invest  295.00  in ATAI Life Sciences on September 1, 2022 and sell it today you would earn a total of  58.00  from holding ATAI Life Sciences or generate 19.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

Telkom Indonesia Tbk  vs.  ATAI Life Sciences

 Performance (%) 
       Timeline  
Telkom Indonesia Tbk 
Telkom Performance
0 of 100
Over the last 90 days Telkom Indonesia Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Telkom Indonesia is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
ATAI Life Sciences 
ATAI Life Performance
0 of 100
Over the last 90 days ATAI Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ATAI Life Price Channel

Telkom Indonesia and ATAI Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Telkom Indonesia and ATAI Life

The main advantage of trading using opposite Telkom Indonesia and ATAI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, ATAI Life 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 ATAI Life will offset losses from the drop in ATAI Life's long position.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Telkom Indonesia as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Telkom Indonesia's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Telkom Indonesia's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Telkom Indonesia Tbk.
The idea behind Telkom Indonesia Tbk and ATAI Life Sciences 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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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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