Correlation Between Zijin Mining and Cars
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Cars 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 Cars 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 Cars Inc, you can compare the effects of market volatilities on Zijin Mining and Cars 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 Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Cars.
Diversification Opportunities for Zijin Mining and Cars
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zijin and Cars is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc 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 Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Zijin Mining i.e., Zijin Mining and Cars go up and down completely randomly.
Pair Corralation between Zijin Mining and Cars
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Cars. In addition to that, Zijin Mining is 1.19 times more volatile than Cars Inc. It trades about -0.05 of its total potential returns per unit of risk. Cars Inc is currently generating about 0.37 per unit of volatility. If you would invest 1,460 in Cars Inc on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Cars Inc or generate 27.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Cars Inc
Performance |
| Timeline |
| Zijin Mining Group |
| Cars Inc |
Zijin Mining and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Cars
The main advantage of trading using opposite Zijin Mining and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' 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 |
| Cars vs. Eastman Chemical | Cars vs. GRIFFIN MINING LTD | Cars vs. Shin Etsu Chemical Co | Cars vs. KINGBOARD CHEMICAL |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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