Correlation Between Zijin Mining and Avanos Medical
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Avanos Medical 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 Avanos Medical 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 Avanos Medical, you can compare the effects of market volatilities on Zijin Mining and Avanos Medical 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 Avanos Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Avanos Medical.
Diversification Opportunities for Zijin Mining and Avanos Medical
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zijin and Avanos is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Avanos Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanos Medical 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 Avanos Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanos Medical has no effect on the direction of Zijin Mining i.e., Zijin Mining and Avanos Medical go up and down completely randomly.
Pair Corralation between Zijin Mining and Avanos Medical
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Avanos Medical. In addition to that, Zijin Mining is 1.34 times more volatile than Avanos Medical. It trades about -0.05 of its total potential returns per unit of risk. Avanos Medical is currently generating about 0.11 per unit of volatility. If you would invest 1,690 in Avanos Medical on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Avanos Medical or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Avanos Medical
Performance |
| Timeline |
| Zijin Mining Group |
| Avanos Medical |
Zijin Mining and Avanos Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Avanos Medical
The main advantage of trading using opposite Zijin Mining and Avanos Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Avanos Medical 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 Avanos Medical will offset losses from the drop in Avanos Medical's long position.| Zijin Mining vs. Astral Foods Limited | Zijin Mining vs. GALENA MINING LTD | Zijin Mining vs. CN MODERN DAIRY | Zijin Mining vs. TYSON FOODS A |
| Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc | Avanos Medical vs. Apple Inc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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