Correlation Between Western Mining and Zijin Mining
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By analyzing existing cross correlation between Western Mining Co and Zijin Mining Group, you can compare the effects of market volatilities on Western Mining 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 Western Mining with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Mining and Zijin Mining.
Diversification Opportunities for Western Mining and Zijin Mining
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Zijin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Western Mining Co 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 Western 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 Western Mining Co 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 Western Mining i.e., Western Mining and Zijin Mining go up and down completely randomly.
Pair Corralation between Western Mining and Zijin Mining
Assuming the 90 days trading horizon Western Mining Co is expected to generate 1.1 times more return on investment than Zijin Mining. However, Western Mining is 1.1 times more volatile than Zijin Mining Group. It trades about -0.19 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.26 per unit of risk. If you would invest 1,823 in Western Mining Co on August 28, 2024 and sell it today you would lose (144.00) from holding Western Mining Co or give up 7.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Mining Co vs. Zijin Mining Group
Performance |
| Timeline |
| Western Mining |
| Zijin Mining Group |
Western Mining and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Mining and Zijin Mining
The main advantage of trading using opposite Western Mining and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Mining 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.| Western Mining vs. Zijin Mining Group | Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Shandong Gold Mining |
| Zijin Mining vs. Sichuan Fulin Transportation | Zijin Mining vs. Jiangsu Yanghe Brewery | Zijin Mining vs. Broadex Technologies Co | Zijin Mining vs. Haima Automobile Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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