Correlation Between Zijin Mining and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Eastman Chemical 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 Eastman Chemical 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 Eastman Chemical, you can compare the effects of market volatilities on Zijin Mining and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Eastman Chemical.
Diversification Opportunities for Zijin Mining and Eastman Chemical
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Eastman is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Zijin Mining i.e., Zijin Mining and Eastman Chemical go up and down completely randomly.
Pair Corralation between Zijin Mining and Eastman Chemical
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.89 times more return on investment than Eastman Chemical. However, Zijin Mining is 1.89 times more volatile than Eastman Chemical. It trades about -0.04 of its potential returns per unit of risk. Eastman Chemical is currently generating about -0.12 per unit of risk. If you would invest 176.00 in Zijin Mining Group on September 19, 2024 and sell it today you would lose (5.00) from holding Zijin Mining Group or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Eastman Chemical
Performance |
| Timeline |
| Zijin Mining Group |
| Eastman Chemical |
Zijin Mining and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Eastman Chemical
The main advantage of trading using opposite Zijin Mining and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical'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 |
| Eastman Chemical vs. BLUESCOPE STEEL | Eastman Chemical vs. KRAKATAU STEEL B | Eastman Chemical vs. Carsales | Eastman Chemical vs. NIPPON STEEL SPADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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