Correlation Between Apple and Telkom Indonesia

Can any of the company-specific risk be diversified away by investing in both Apple and Telkom Indonesia 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 Apple and Telkom Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc and Telkom Indonesia Tbk, you can compare the effects of market volatilities on Apple and Telkom Indonesia 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 Apple with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Telkom Indonesia.

Diversification Opportunities for Apple and Telkom Indonesia

-0.18

Correlation Coefficient

Apple  Telkom Indonesia

Good diversification

The 3 months correlation between Apple and Telkom is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Telkom Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telkom Indonesia Tbk and Apple 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 Apple Inc are associated (or correlated) with Telkom Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telkom Indonesia Tbk has no effect on the direction of Apple i.e., Apple and Telkom Indonesia go up and down completely randomly.

Pair Corralation between Apple and Telkom Indonesia

Assuming the 90 days trading horizon Apple is expected to generate 55.15 times less return on investment than Telkom Indonesia. But when comparing it to its historical volatility, Apple Inc is 4.27 times less risky than Telkom Indonesia. It trades about 0.01 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Telkom Indonesia Tbk on April 24, 2025 and sell it today you would earn a total of  2.00  from holding Telkom Indonesia Tbk or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Apple Inc  vs.  Telkom Indonesia Tbk

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Apple is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Telkom Indonesia Tbk

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Telkom Indonesia Tbk are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Telkom Indonesia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and Telkom Indonesia

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

The idea behind Apple Inc and Telkom Indonesia Tbk 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.