Correlation Between Zijin Mining and BRAEMAR HOTELS
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and BRAEMAR HOTELS 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 BRAEMAR HOTELS 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 BRAEMAR HOTELS RES, you can compare the effects of market volatilities on Zijin Mining and BRAEMAR HOTELS 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 BRAEMAR HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and BRAEMAR HOTELS.
Diversification Opportunities for Zijin Mining and BRAEMAR HOTELS
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zijin and BRAEMAR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES 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 BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of Zijin Mining i.e., Zijin Mining and BRAEMAR HOTELS go up and down completely randomly.
Pair Corralation between Zijin Mining and BRAEMAR HOTELS
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.68 times more return on investment than BRAEMAR HOTELS. However, Zijin Mining Group is 1.47 times less risky than BRAEMAR HOTELS. It trades about 0.03 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about -0.02 per unit of risk. If you would invest 167.00 in Zijin Mining Group on October 26, 2024 and sell it today you would earn a total of 11.00 from holding Zijin Mining Group or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. BRAEMAR HOTELS RES
Performance |
| Timeline |
| Zijin Mining Group |
| BRAEMAR HOTELS RES |
Zijin Mining and BRAEMAR HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and BRAEMAR HOTELS
The main advantage of trading using opposite Zijin Mining and BRAEMAR HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, BRAEMAR HOTELS 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 BRAEMAR HOTELS will offset losses from the drop in BRAEMAR HOTELS'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 |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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