Correlation Between Bayerische Motoren and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Bayerische Motoren 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 Bayerische Motoren and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayerische Motoren Werke and Zijin Mining Group, you can compare the effects of market volatilities on Bayerische Motoren 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 Bayerische Motoren with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayerische Motoren and Zijin Mining.
Diversification Opportunities for Bayerische Motoren and Zijin Mining
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bayerische and Zijin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bayerische Motoren Werke 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 Bayerische Motoren 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 Bayerische Motoren Werke 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 Bayerische Motoren i.e., Bayerische Motoren and Zijin Mining go up and down completely randomly.
Pair Corralation between Bayerische Motoren and Zijin Mining
Assuming the 90 days horizon Bayerische Motoren Werke is expected to under-perform the Zijin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Bayerische Motoren Werke is 2.18 times less risky than Zijin Mining. The stock trades about -0.06 of its potential returns per unit of risk. The Zijin Mining Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 113.00 in Zijin Mining Group on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Zijin Mining Group or generate 56.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayerische Motoren Werke vs. Zijin Mining Group
Performance |
| Timeline |
| Bayerische Motoren Werke |
| Zijin Mining Group |
Bayerische Motoren and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayerische Motoren and Zijin Mining
The main advantage of trading using opposite Bayerische Motoren and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayerische Motoren 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.| Bayerische Motoren vs. Singapore Airlines Limited | Bayerische Motoren vs. Coeur Mining | Bayerische Motoren vs. International Consolidated Airlines | Bayerische Motoren vs. AEGEAN AIRLINES |
| Zijin Mining vs. REVO INSURANCE SPA | Zijin Mining vs. WillScot Mobile Mini | Zijin Mining vs. COMINTL BANK ADR1 | Zijin Mining vs. Ribbon Communications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |