Correlation Between Check Point and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Check Point 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 Check Point and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Check Point Software and Zijin Mining Group, you can compare the effects of market volatilities on Check Point 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 Check Point with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Check Point and Zijin Mining.
Diversification Opportunities for Check Point and Zijin Mining
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Check and Zijin is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Check Point Software 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 Check Point 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 Check Point Software 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 Check Point i.e., Check Point and Zijin Mining go up and down completely randomly.
Pair Corralation between Check Point and Zijin Mining
Assuming the 90 days trading horizon Check Point is expected to generate 2.57 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, Check Point Software is 2.19 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 88.00 in Zijin Mining Group on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Zijin Mining Group or generate 101.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Check Point Software vs. Zijin Mining Group
Performance |
| Timeline |
| Check Point Software |
| Zijin Mining Group |
Check Point and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Check Point and Zijin Mining
The main advantage of trading using opposite Check Point and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Check Point 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.| Check Point vs. Alfa Financial Software | Check Point vs. ASURE SOFTWARE | Check Point vs. CPU SOFTWAREHOUSE | Check Point vs. USU Software AG |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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