Correlation Between Aneka Tambang and Zenith Minerals

Can any of the company-specific risk be diversified away by investing in both Aneka Tambang and Zenith Minerals 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 Aneka Tambang and Zenith Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aneka Tambang Tbk and Zenith Minerals, you can compare the effects of market volatilities on Aneka Tambang and Zenith Minerals 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 Aneka Tambang with a short position of Zenith Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Zenith Minerals.

Diversification Opportunities for Aneka Tambang and Zenith Minerals

0.0

Correlation Coefficient

Aneka Tambang  Zenith Minerals

Pay attention - limited upside

The 3 months correlation between Aneka and Zenith is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang Tbk and Zenith Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zenith Minerals and Aneka Tambang 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 Aneka Tambang Tbk are associated (or correlated) with Zenith Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zenith Minerals has no effect on the direction of Aneka Tambang i.e., Aneka Tambang and Zenith Minerals go up and down completely randomly.

Pair Corralation between Aneka Tambang and Zenith Minerals

If you would invest (100.00) in Aneka Tambang Tbk on October 1, 2024 and sell it today you would earn a total of  100.00  from holding Aneka Tambang Tbk or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aneka Tambang Tbk  vs.  Zenith Minerals

Aneka Tambang Tbk

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Aneka Tambang Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Aneka Tambang is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Zenith Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zenith Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Zenith Minerals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aneka Tambang and Zenith Minerals

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

The idea behind Aneka Tambang Tbk and Zenith Minerals 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.