Correlation Between COSMOSTEEL HLDGS and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and Zijin Mining Group, you can compare the effects of market volatilities on COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and Zijin Mining.
Diversification Opportunities for COSMOSTEEL HLDGS and Zijin Mining
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COSMOSTEEL and Zijin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and Zijin Mining go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and Zijin Mining
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 0.56 times more return on investment than Zijin Mining. However, COSMOSTEEL HLDGS is 1.79 times less risky than Zijin Mining. It trades about 0.03 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.07 per unit of risk. If you would invest 6.00 in COSMOSTEEL HLDGS on August 27, 2024 and sell it today you would earn a total of 0.05 from holding COSMOSTEEL HLDGS or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSMOSTEEL HLDGS vs. Zijin Mining Group
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| Zijin Mining Group |
COSMOSTEEL HLDGS and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and Zijin Mining
The main advantage of trading using opposite COSMOSTEEL HLDGS and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS 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.| COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Microsoft |
| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. NMI Holdings | Zijin Mining vs. Origin Agritech |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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