Correlation Between Zijin Mining and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Eidesvik Offshore 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 Eidesvik Offshore 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 Eidesvik Offshore ASA, you can compare the effects of market volatilities on Zijin Mining and Eidesvik Offshore 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 Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Eidesvik Offshore.
Diversification Opportunities for Zijin Mining and Eidesvik Offshore
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and Eidesvik is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Eidesvik Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eidesvik Offshore ASA 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 Eidesvik Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eidesvik Offshore ASA has no effect on the direction of Zijin Mining i.e., Zijin Mining and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Zijin Mining and Eidesvik Offshore
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.97 times more return on investment than Eidesvik Offshore. However, Zijin Mining is 1.97 times more volatile than Eidesvik Offshore ASA. It trades about -0.07 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.15 per unit of risk. If you would invest 192.00 in Zijin Mining Group on August 31, 2024 and sell it today you would lose (12.00) from holding Zijin Mining Group or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Zijin Mining Group |
| Eidesvik Offshore ASA |
Zijin Mining and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Eidesvik Offshore
The main advantage of trading using opposite Zijin Mining and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Eidesvik Offshore 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 Eidesvik Offshore will offset losses from the drop in Eidesvik Offshore's 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 |
| Eidesvik Offshore vs. Playtech plc | Eidesvik Offshore vs. UET United Electronic | Eidesvik Offshore vs. GigaMedia | Eidesvik Offshore vs. Beijing Media |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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