Correlation Between Avanos Medical and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Avanos Medical 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 Avanos Medical and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanos Medical and Zijin Mining Group, you can compare the effects of market volatilities on Avanos Medical 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 Avanos Medical with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and Zijin Mining.
Diversification Opportunities for Avanos Medical and Zijin Mining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avanos and Zijin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Avanos Medical 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 Avanos Medical 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 Avanos Medical 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 Avanos Medical i.e., Avanos Medical and Zijin Mining go up and down completely randomly.
Pair Corralation between Avanos Medical and Zijin Mining
Assuming the 90 days trading horizon Avanos Medical is expected to generate 0.75 times more return on investment than Zijin Mining. However, Avanos Medical is 1.34 times less risky than Zijin Mining. It trades about 0.11 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.05 per unit of risk. If you would invest 1,690 in Avanos Medical on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Avanos Medical or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanos Medical vs. Zijin Mining Group
Performance |
| Timeline |
| Avanos Medical |
| Zijin Mining Group |
Avanos Medical and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanos Medical and Zijin Mining
The main advantage of trading using opposite Avanos Medical and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanos Medical 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.| Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc |
| Zijin Mining vs. Astral Foods Limited | Zijin Mining vs. GALENA MINING LTD | Zijin Mining vs. CN MODERN DAIRY | Zijin Mining vs. TYSON FOODS A |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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