Correlation Between Gaming and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Gaming 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 Gaming and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming and Leisure and Zijin Mining Group, you can compare the effects of market volatilities on Gaming 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 Gaming with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming and Zijin Mining.
Diversification Opportunities for Gaming and Zijin Mining
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaming and Zijin is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure 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 Gaming 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 Gaming and Leisure 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 Gaming i.e., Gaming and Zijin Mining go up and down completely randomly.
Pair Corralation between Gaming and Zijin Mining
Assuming the 90 days horizon Gaming and Leisure is expected to under-perform the Zijin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Gaming and Leisure is 2.69 times less risky than Zijin Mining. The stock trades about -0.14 of its potential returns per unit of risk. The Zijin Mining Group is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 184.00 in Zijin Mining Group on October 11, 2024 and sell it today you would lose (7.00) from holding Zijin Mining Group or give up 3.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming and Leisure vs. Zijin Mining Group
Performance |
| Timeline |
| Gaming and Leisure |
| Zijin Mining Group |
Gaming and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming and Zijin Mining
The main advantage of trading using opposite Gaming and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming 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.| Gaming vs. Singapore Airlines Limited | Gaming vs. Cars Inc | Gaming vs. CARSALESCOM | Gaming vs. SOUTHWEST AIRLINES |
| Zijin Mining vs. Playa Hotels Resorts | Zijin Mining vs. Gaming and Leisure | Zijin Mining vs. Wyndham Hotels Resorts | Zijin Mining vs. Pebblebrook Hotel Trust |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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