Correlation Between Zijin Mining and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Charter Communications 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 Charter Communications 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 Charter Communications, you can compare the effects of market volatilities on Zijin Mining and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Charter Communications.
Diversification Opportunities for Zijin Mining and Charter Communications
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zijin and Charter is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Zijin Mining i.e., Zijin Mining and Charter Communications go up and down completely randomly.
Pair Corralation between Zijin Mining and Charter Communications
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.48 times more return on investment than Charter Communications. However, Zijin Mining is 1.48 times more volatile than Charter Communications. It trades about 0.06 of its potential returns per unit of risk. Charter Communications is currently generating about 0.02 per unit of risk. If you would invest 84.00 in Zijin Mining Group on September 23, 2024 and sell it today you would earn a total of 87.00 from holding Zijin Mining Group or generate 103.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Charter Communications
Performance |
| Timeline |
| Zijin Mining Group |
| Charter Communications |
Zijin Mining and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Charter Communications
The main advantage of trading using opposite Zijin Mining and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Rio Tinto Group |
| Charter Communications vs. MGIC INVESTMENT | Charter Communications vs. Strategic Investments AS | Charter Communications vs. Perseus Mining Limited | Charter Communications vs. Harmony Gold Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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