Correlation Between Consol Energy and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Consol Energy 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 Consol Energy and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consol Energy and Zijin Mining Group, you can compare the effects of market volatilities on Consol Energy 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 Consol Energy with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consol Energy and Zijin Mining.
Diversification Opportunities for Consol Energy and Zijin Mining
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Consol and Zijin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Consol Energy 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 Consol Energy 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 Consol Energy 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 Consol Energy i.e., Consol Energy and Zijin Mining go up and down completely randomly.
Pair Corralation between Consol Energy and Zijin Mining
Given the investment horizon of 90 days Consol Energy is expected to generate 3.36 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, Consol Energy is 3.26 times less risky than Zijin Mining. It trades about 0.05 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Zijin Mining Group on October 12, 2024 and sell it today you would earn a total of 76.00 from holding Zijin Mining Group or generate 69.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.71% |
| Values | Daily Returns |
Consol Energy vs. Zijin Mining Group
Performance |
| Timeline |
| Consol Energy |
| Zijin Mining Group |
Consol Energy and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consol Energy and Zijin Mining
The main advantage of trading using opposite Consol Energy and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consol Energy 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.| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
| Zijin Mining vs. Torex Gold Resources | Zijin Mining vs. Wesdome Gold Mines | Zijin Mining vs. Northern Star Resources | Zijin Mining vs. Regis Resources |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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