Correlation Between Telkom Indonesia and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Telkom Indonesia and Zijin Mining 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 Zijin Mining 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 Zijin Mining Group, you can compare the effects of market volatilities on Telkom Indonesia and Zijin Mining 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 Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telkom Indonesia and Zijin Mining.
Diversification Opportunities for Telkom Indonesia and Zijin Mining
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Telkom and Zijin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Telkom Indonesia Tbk and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group 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 Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Telkom Indonesia i.e., Telkom Indonesia and Zijin Mining go up and down completely randomly.
Pair Corralation between Telkom Indonesia and Zijin Mining
Assuming the 90 days trading horizon Telkom Indonesia Tbk is expected to under-perform the Zijin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Telkom Indonesia Tbk is 3.4 times less risky than Zijin Mining. The stock trades about -0.07 of its potential returns per unit of risk. The Zijin Mining Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Zijin Mining Group on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Zijin Mining Group or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telkom Indonesia Tbk vs. Zijin Mining Group
Performance |
| Timeline |
| Telkom Indonesia Tbk |
| Zijin Mining Group |
Telkom Indonesia and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telkom Indonesia and Zijin Mining
The main advantage of trading using opposite Telkom Indonesia and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telkom Indonesia position performs unexpectedly, Zijin Mining 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.| Telkom Indonesia vs. Zijin Mining Group | Telkom Indonesia vs. Genco Shipping Trading | Telkom Indonesia vs. Evolution Mining Limited | Telkom Indonesia vs. ADRIATIC METALS LS 013355 |
| Zijin Mining vs. ARISTOCRAT LEISURE | Zijin Mining vs. EAT WELL INVESTMENT | Zijin Mining vs. ePlay Digital | Zijin Mining vs. PennantPark 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |