Correlation Between Zijin Mining and RBC Bearings
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and RBC Bearings 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 RBC Bearings 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 RBC Bearings Incorporated, you can compare the effects of market volatilities on Zijin Mining and RBC Bearings 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 RBC Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and RBC Bearings.
Diversification Opportunities for Zijin Mining and RBC Bearings
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and RBC is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and RBC Bearings Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Bearings 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 RBC Bearings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Bearings has no effect on the direction of Zijin Mining i.e., Zijin Mining and RBC Bearings go up and down completely randomly.
Pair Corralation between Zijin Mining and RBC Bearings
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.74 times more return on investment than RBC Bearings. However, Zijin Mining is 1.74 times more volatile than RBC Bearings Incorporated. It trades about 0.07 of its potential returns per unit of risk. RBC Bearings Incorporated is currently generating about 0.06 per unit of risk. If you would invest 82.00 in Zijin Mining Group on September 12, 2024 and sell it today you would earn a total of 104.00 from holding Zijin Mining Group or generate 126.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Zijin Mining Group vs. RBC Bearings Incorporated
Performance |
| Timeline |
| Zijin Mining Group |
| RBC Bearings |
Zijin Mining and RBC Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and RBC Bearings
The main advantage of trading using opposite Zijin Mining and RBC Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, RBC Bearings 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 RBC Bearings will offset losses from the drop in RBC Bearings' long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Vale SA | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. SIVERS SEMICONDUCTORS AB |
| RBC Bearings vs. ADRIATIC METALS LS 013355 | RBC Bearings vs. LION ONE METALS | RBC Bearings vs. Zijin Mining Group | RBC Bearings vs. Perseus Mining Limited |
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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