Correlation Between Telkom Indonesia and Infosys

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

Diversification Opportunities for Telkom Indonesia and Infosys

-0.23

Correlation Coefficient

Telkom Indonesia  Infosys

Very good diversification

The 3 months correlation between Telkom and Infosys is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Infosys Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Ltd ADR 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 Infosys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infosys Ltd ADR has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Infosys go up and down completely randomly.

Pair Corralation between Telkom Indonesia and Infosys

Considering the 90-day investment horizon Telkom Indonesia Tbk is expected to under-perform the Infosys. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 1.14 times less risky than Infosys. The stock trades about -0.24 of its potential returns per unit of risk. The Infosys Ltd ADR is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  1,715  in Infosys Ltd ADR on July 22, 2025 and sell it today you would lose (82.00) from holding Infosys Ltd ADR or give up 4.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Telkom Indonesia Tbk  vs.  Infosys Ltd ADR

Telkom Indonesia Tbk

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Telkom Indonesia Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Telkom Indonesia is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Infosys Ltd ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Infosys Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Telkom Indonesia and Infosys

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

The idea behind Telkom Indonesia Tbk and Infosys Ltd ADR 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.