Correlation Between Zijin Mining and Tibet Huayu
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By analyzing existing cross correlation between Zijin Mining Group and Tibet Huayu Mining, you can compare the effects of market volatilities on Zijin Mining and Tibet Huayu 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 Zijin Mining with a short position of Tibet Huayu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Tibet Huayu.
Diversification Opportunities for Zijin Mining and Tibet Huayu
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Tibet is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Tibet Huayu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tibet Huayu Mining and Zijin 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 Zijin Mining Group are associated (or correlated) with Tibet Huayu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tibet Huayu Mining has no effect on the direction of Zijin Mining i.e., Zijin Mining and Tibet Huayu go up and down completely randomly.
Pair Corralation between Zijin Mining and Tibet Huayu
Assuming the 90 days trading horizon Zijin Mining Group is expected to under-perform the Tibet Huayu. But the stock apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 2.61 times less risky than Tibet Huayu. The stock trades about -0.24 of its potential returns per unit of risk. The Tibet Huayu Mining is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,278 in Tibet Huayu Mining on August 31, 2024 and sell it today you would earn a total of 141.00 from holding Tibet Huayu Mining or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Tibet Huayu Mining
Performance |
| Timeline |
| Zijin Mining Group |
| Tibet Huayu Mining |
Zijin Mining and Tibet Huayu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Tibet Huayu
The main advantage of trading using opposite Zijin Mining and Tibet Huayu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Tibet Huayu 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 Tibet Huayu will offset losses from the drop in Tibet Huayu's long position.The idea behind Zijin Mining Group and Tibet Huayu Mining 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.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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