Correlation Between Zijin Mining and G8 EDUCATION
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and G8 EDUCATION 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 G8 EDUCATION 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 G8 EDUCATION, you can compare the effects of market volatilities on Zijin Mining and G8 EDUCATION 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 G8 EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and G8 EDUCATION.
Diversification Opportunities for Zijin Mining and G8 EDUCATION
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zijin and 3EAG is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and G8 EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G8 EDUCATION 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 G8 EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G8 EDUCATION has no effect on the direction of Zijin Mining i.e., Zijin Mining and G8 EDUCATION go up and down completely randomly.
Pair Corralation between Zijin Mining and G8 EDUCATION
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.66 times more return on investment than G8 EDUCATION. However, Zijin Mining is 1.66 times more volatile than G8 EDUCATION. It trades about 0.08 of its potential returns per unit of risk. G8 EDUCATION is currently generating about -0.03 per unit of risk. If you would invest 173.00 in Zijin Mining Group on October 20, 2024 and sell it today you would earn a total of 7.00 from holding Zijin Mining Group or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. G8 EDUCATION
Performance |
| Timeline |
| Zijin Mining Group |
| G8 EDUCATION |
Zijin Mining and G8 EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and G8 EDUCATION
The main advantage of trading using opposite Zijin Mining and G8 EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, G8 EDUCATION 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 G8 EDUCATION will offset losses from the drop in G8 EDUCATION's long position.| Zijin Mining vs. DAIRY FARM INTL | Zijin Mining vs. ecotel communication ag | Zijin Mining vs. Singapore Telecommunications Limited | Zijin Mining vs. Cairo Communication SpA |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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