Correlation Between Red Avenue and Zijin Mining
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By analyzing existing cross correlation between Red Avenue New and Zijin Mining Group, you can compare the effects of market volatilities on Red Avenue 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 Red Avenue with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Avenue and Zijin Mining.
Diversification Opportunities for Red Avenue and Zijin Mining
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Red and Zijin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Red Avenue New 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 Red Avenue 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 Red Avenue New 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 Red Avenue i.e., Red Avenue and Zijin Mining go up and down completely randomly.
Pair Corralation between Red Avenue and Zijin Mining
Assuming the 90 days trading horizon Red Avenue New is expected to generate 2.06 times more return on investment than Zijin Mining. However, Red Avenue is 2.06 times more volatile than Zijin Mining Group. It trades about 0.12 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.25 per unit of risk. If you would invest 3,280 in Red Avenue New on September 2, 2024 and sell it today you would earn a total of 254.00 from holding Red Avenue New or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Avenue New vs. Zijin Mining Group
Performance |
| Timeline |
| Red Avenue New |
| Zijin Mining Group |
Red Avenue and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Avenue and Zijin Mining
The main advantage of trading using opposite Red Avenue and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Avenue 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.| Red Avenue vs. Zijin Mining Group | Red Avenue vs. Baoshan Iron Steel | Red Avenue vs. Shandong Gold Mining | Red Avenue vs. Rongsheng Petrochemical Co |
| Zijin Mining vs. Wanhua Chemical Group | Zijin Mining vs. Baoshan Iron Steel | Zijin Mining vs. Shandong Gold Mining | Zijin Mining vs. Rongsheng Petrochemical Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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