Correlation Between Zijin Mining and Autohome ADR
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Autohome ADR 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 Autohome ADR 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 Autohome ADR, you can compare the effects of market volatilities on Zijin Mining and Autohome ADR 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 Autohome ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Autohome ADR.
Diversification Opportunities for Zijin Mining and Autohome ADR
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Autohome is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome 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 Autohome ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome ADR has no effect on the direction of Zijin Mining i.e., Zijin Mining and Autohome ADR go up and down completely randomly.
Pair Corralation between Zijin Mining and Autohome ADR
Assuming the 90 days horizon Zijin Mining is expected to generate 2.41 times less return on investment than Autohome ADR. But when comparing it to its historical volatility, Zijin Mining Group is 1.4 times less risky than Autohome ADR. It trades about 0.08 of its potential returns per unit of risk. Autohome ADR is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,340 in Autohome ADR on October 25, 2024 and sell it today you would earn a total of 200.00 from holding Autohome ADR or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Zijin Mining Group vs. Autohome ADR
Performance |
| Timeline |
| Zijin Mining Group |
| Autohome ADR |
Zijin Mining and Autohome ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Autohome ADR
The main advantage of trading using opposite Zijin Mining and Autohome ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Autohome ADR 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 Autohome ADR will offset losses from the drop in Autohome ADR's long position.| Zijin Mining vs. Salesforce | Zijin Mining vs. FLOW TRADERS LTD | Zijin Mining vs. Hyatt Hotels | Zijin Mining vs. TRADELINK ELECTRON |
| Autohome ADR vs. Alphabet Class A | Autohome ADR vs. Meta Platforms | Autohome ADR vs. Tencent Holdings Ltd | Autohome ADR vs. Tencent Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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