Correlation Between ARISTOCRAT LEISURE and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARISTOCRAT LEISURE and Zijin Mining Group, you can compare the effects of market volatilities on ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARISTOCRAT LEISURE and Zijin Mining.
Diversification Opportunities for ARISTOCRAT LEISURE and Zijin Mining
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ARISTOCRAT and Zijin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and Zijin Mining go up and down completely randomly.
Pair Corralation between ARISTOCRAT LEISURE and Zijin Mining
Assuming the 90 days trading horizon ARISTOCRAT LEISURE is expected to generate 0.26 times more return on investment than Zijin Mining. However, ARISTOCRAT LEISURE is 3.9 times less risky than Zijin Mining. It trades about 0.56 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.09 per unit of risk. If you would invest 3,722 in ARISTOCRAT LEISURE on September 3, 2024 and sell it today you would earn a total of 438.00 from holding ARISTOCRAT LEISURE or generate 11.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARISTOCRAT LEISURE vs. Zijin Mining Group
Performance |
| Timeline |
| ARISTOCRAT LEISURE |
| Zijin Mining Group |
ARISTOCRAT LEISURE and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARISTOCRAT LEISURE and Zijin Mining
The main advantage of trading using opposite ARISTOCRAT LEISURE and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARISTOCRAT LEISURE 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.| ARISTOCRAT LEISURE vs. TOTAL GABON | ARISTOCRAT LEISURE vs. Walgreens Boots Alliance | ARISTOCRAT LEISURE vs. Peak Resources Limited |
| Zijin Mining vs. ARISTOCRAT LEISURE | Zijin Mining vs. EAT WELL INVESTMENT | Zijin Mining vs. ePlay Digital | Zijin Mining vs. PennantPark 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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