Correlation Between Grupo Carso and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Grupo Carso 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 Grupo Carso and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Carso SAB and Zijin Mining Group, you can compare the effects of market volatilities on Grupo Carso 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 Grupo Carso with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Carso and Zijin Mining.
Diversification Opportunities for Grupo Carso and Zijin Mining
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grupo and Zijin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB 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 Grupo Carso 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 Grupo Carso SAB 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 Grupo Carso i.e., Grupo Carso and Zijin Mining go up and down completely randomly.
Pair Corralation between Grupo Carso and Zijin Mining
Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the Zijin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Carso SAB is 1.62 times less risky than Zijin Mining. The stock trades about -0.16 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 177.00 in Zijin Mining Group on October 1, 2024 and sell it today you would lose (5.00) from holding Zijin Mining Group or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Carso SAB vs. Zijin Mining Group
Performance |
| Timeline |
| Grupo Carso SAB |
| Zijin Mining Group |
Grupo Carso and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Carso and Zijin Mining
The main advantage of trading using opposite Grupo Carso and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Carso 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.| Grupo Carso vs. Honeywell International | Grupo Carso vs. CITIC Limited | Grupo Carso vs. CITIC LTD ADR5 | Grupo Carso vs. CK HUTCHISON HLDGS |
| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Vale SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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