Correlation Between Zijin Mining and Datang International
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Datang International 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 Datang International 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 Datang International Power, you can compare the effects of market volatilities on Zijin Mining and Datang International 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 Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Datang International.
Diversification Opportunities for Zijin Mining and Datang International
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Datang is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International 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 Datang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang International has no effect on the direction of Zijin Mining i.e., Zijin Mining and Datang International go up and down completely randomly.
Pair Corralation between Zijin Mining and Datang International
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.95 times more return on investment than Datang International. However, Zijin Mining Group is 1.06 times less risky than Datang International. It trades about 0.07 of its potential returns per unit of risk. Datang International Power is currently generating about 0.06 per unit of risk. If you would invest 113.00 in Zijin Mining Group on September 14, 2024 and sell it today you would earn a total of 71.00 from holding Zijin Mining Group or generate 62.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Datang International Power
Performance |
| Timeline |
| Zijin Mining Group |
| Datang International |
Zijin Mining and Datang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Datang International
The main advantage of trading using opposite Zijin Mining and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Datang International 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 Datang International will offset losses from the drop in Datang International's 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 |
| Datang International vs. Autohome ADR | Datang International vs. Neinor Homes SA | Datang International vs. Haier Smart Home | Datang International vs. bet at home AG |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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