Correlation Between Zijin Mining and Telkom Indonesia
Can any of the company-specific risk be diversified away by investing in both Zijin Mining 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 Zijin Mining and Telkom Indonesia 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 Telkom Indonesia Tbk, you can compare the effects of market volatilities on Zijin Mining 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 Zijin Mining with a short position of Telkom Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Telkom Indonesia.
Diversification Opportunities for Zijin Mining and Telkom Indonesia
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Telkom is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group 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 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 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 Zijin Mining i.e., Zijin Mining and Telkom Indonesia go up and down completely randomly.
Pair Corralation between Zijin Mining and Telkom Indonesia
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.79 times more return on investment than Telkom Indonesia. However, Zijin Mining Group is 1.27 times less risky than Telkom Indonesia. It trades about 0.06 of its potential returns per unit of risk. Telkom Indonesia Tbk is currently generating about 0.0 per unit of risk. If you would invest 91.00 in Zijin Mining Group on November 1, 2024 and sell it today you would earn a total of 84.00 from holding Zijin Mining Group or generate 92.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Zijin Mining Group vs. Telkom Indonesia Tbk
Performance |
| Timeline |
| Zijin Mining Group |
| Telkom Indonesia Tbk |
Zijin Mining and Telkom Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Telkom Indonesia
The main advantage of trading using opposite Zijin Mining and Telkom Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining 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.| Zijin Mining vs. Compagnie Plastic Omnium | Zijin Mining vs. Summit Materials | Zijin Mining vs. SIERRA METALS | Zijin Mining vs. Osisko Metals |
| Telkom Indonesia vs. National Retail Properties | Telkom Indonesia vs. Molson Coors Beverage | Telkom Indonesia vs. PICKN PAY STORES | Telkom Indonesia vs. Ross Stores |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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