Correlation Between Telefast Indonesia and PT Surya

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

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

Diversification Opportunities for Telefast Indonesia and PT Surya

0.04

Correlation Coefficient

Telefast Indonesia  PT Surya

Significant diversification

The 3 months correlation between Telefast and SPTO is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Telefast Indonesia and PT Surya Pertiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Surya Pertiwi and Telefast 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 Telefast Indonesia are associated (or correlated) with PT Surya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Surya Pertiwi has no effect on the direction of Telefast Indonesia i.e., Telefast Indonesia and PT Surya go up and down completely randomly.

Pair Corralation between Telefast Indonesia and PT Surya

Assuming the 90 days trading horizon Telefast Indonesia is expected to generate 2.07 times more return on investment than PT Surya. However, Telefast Indonesia is 2.07 times more volatile than PT Surya Pertiwi. It trades about 0.13 of its potential returns per unit of risk. PT Surya Pertiwi is currently generating about 0.08 per unit of risk. If you would invest  10,500  in Telefast Indonesia on April 25, 2025 and sell it today you would earn a total of  2,500  from holding Telefast Indonesia or generate 23.81% return on investment over 90 days.

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

Telefast Indonesia  vs.  PT Surya Pertiwi

Telefast Indonesia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telefast Indonesia are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Telefast Indonesia disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Surya Pertiwi

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Surya Pertiwi are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, PT Surya may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Telefast Indonesia and PT Surya

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

The idea behind Telefast Indonesia and PT Surya Pertiwi 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.