Correlation Between Zijin Mining and SOFTBANK P
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and SOFTBANK P 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 Zijin Mining and SOFTBANK P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zijin Mining Group and SOFTBANK P ADR, you can compare the effects of market volatilities on Zijin Mining and SOFTBANK P 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 Zijin Mining with a short position of SOFTBANK P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and SOFTBANK P.
Diversification Opportunities for Zijin Mining and SOFTBANK P
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zijin and SOFTBANK is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and SOFTBANK P ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFTBANK P ADR and Zijin Mining 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 Zijin Mining Group are associated (or correlated) with SOFTBANK P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFTBANK P ADR has no effect on the direction of Zijin Mining i.e., Zijin Mining and SOFTBANK P go up and down completely randomly.
Pair Corralation between Zijin Mining and SOFTBANK P
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.81 times more return on investment than SOFTBANK P. However, Zijin Mining is 1.81 times more volatile than SOFTBANK P ADR. It trades about 0.06 of its potential returns per unit of risk. SOFTBANK P ADR is currently generating about 0.03 per unit of risk. If you would invest 87.00 in Zijin Mining Group on August 29, 2024 and sell it today you would earn a total of 92.00 from holding Zijin Mining Group or generate 105.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. SOFTBANK P ADR
Performance |
| Timeline |
| Zijin Mining Group |
| SOFTBANK P ADR |
Zijin Mining and SOFTBANK P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and SOFTBANK P
The main advantage of trading using opposite Zijin Mining and SOFTBANK P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, SOFTBANK P 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 SOFTBANK P will offset losses from the drop in SOFTBANK P's long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Vale SA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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