Correlation Between Cars and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Cars 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 Cars and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Zijin Mining Group, you can compare the effects of market volatilities on Cars 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 Cars with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Zijin Mining.
Diversification Opportunities for Cars and Zijin Mining
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cars and Zijin is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc 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 Cars 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 Cars Inc 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 Cars i.e., Cars and Zijin Mining go up and down completely randomly.
Pair Corralation between Cars and Zijin Mining
Assuming the 90 days horizon Cars Inc is expected to generate 0.84 times more return on investment than Zijin Mining. However, Cars Inc is 1.19 times less risky than Zijin Mining. It trades about 0.37 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 1,460 in Cars Inc on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Cars Inc or generate 27.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cars Inc vs. Zijin Mining Group
Performance |
| Timeline |
| Cars Inc |
| Zijin Mining Group |
Cars and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Zijin Mining
The main advantage of trading using opposite Cars and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars 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.| Cars vs. Eastman Chemical | Cars vs. GRIFFIN MINING LTD | Cars vs. Shin Etsu Chemical Co | Cars vs. KINGBOARD CHEMICAL |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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