Correlation Between Zijin Mining and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and ALGOMA STEEL 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 ALGOMA STEEL 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 ALGOMA STEEL GROUP, you can compare the effects of market volatilities on Zijin Mining and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and ALGOMA STEEL.
Diversification Opportunities for Zijin Mining and ALGOMA STEEL
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and ALGOMA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of Zijin Mining i.e., Zijin Mining and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between Zijin Mining and ALGOMA STEEL
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the ALGOMA STEEL. In addition to that, Zijin Mining is 1.3 times more volatile than ALGOMA STEEL GROUP. It trades about -0.05 of its total potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about 0.07 per unit of volatility. If you would invest 965.00 in ALGOMA STEEL GROUP on September 1, 2024 and sell it today you would earn a total of 35.00 from holding ALGOMA STEEL GROUP or generate 3.63% 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. ALGOMA STEEL GROUP
Performance |
| Timeline |
| Zijin Mining Group |
| ALGOMA STEEL GROUP |
Zijin Mining and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and ALGOMA STEEL
The main advantage of trading using opposite Zijin Mining and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL'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 |
| ALGOMA STEEL vs. ScanSource | ALGOMA STEEL vs. Tower Semiconductor | ALGOMA STEEL vs. LION ONE METALS | ALGOMA STEEL vs. PRECISION DRILLING P |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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