Correlation Between Zijin Mining and PT Barito
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and PT Barito 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 Zijin Mining and PT Barito into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zijin Mining Group and PT Barito Pacific, you can compare the effects of market volatilities on Zijin Mining and PT Barito 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 Zijin Mining with a short position of PT Barito. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and PT Barito.
Diversification Opportunities for Zijin Mining and PT Barito
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zijin and OB8 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and PT Barito Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Barito Pacific and Zijin Mining 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 Zijin Mining Group are associated (or correlated) with PT Barito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Barito Pacific has no effect on the direction of Zijin Mining i.e., Zijin Mining and PT Barito go up and down completely randomly.
Pair Corralation between Zijin Mining and PT Barito
Assuming the 90 days horizon Zijin Mining is expected to generate 1.05 times less return on investment than PT Barito. But when comparing it to its historical volatility, Zijin Mining Group is 1.67 times less risky than PT Barito. It trades about 0.02 of its potential returns per unit of risk. PT Barito Pacific is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4.59 in PT Barito Pacific on September 3, 2024 and sell it today you would lose (0.59) from holding PT Barito Pacific or give up 12.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. PT Barito Pacific
Performance |
| Timeline |
| Zijin Mining Group |
| PT Barito Pacific |
Zijin Mining and PT Barito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and PT Barito
The main advantage of trading using opposite Zijin Mining and PT Barito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, PT Barito 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 Barito will offset losses from the drop in PT Barito's long position.| Zijin Mining vs. ARISTOCRAT LEISURE | Zijin Mining vs. EAT WELL INVESTMENT | Zijin Mining vs. ePlay Digital | Zijin Mining vs. PennantPark Investment |
| PT Barito vs. Zijin Mining Group | PT Barito vs. ScanSource | PT Barito vs. Eidesvik Offshore ASA | PT Barito vs. BW OFFSHORE LTD |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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