Correlation Between Zijin Mining and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and CSSC 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 CSSC 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 CSSC Offshore Marine, you can compare the effects of market volatilities on Zijin Mining and CSSC 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and CSSC Offshore.
Diversification Opportunities for Zijin Mining and CSSC Offshore
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and CSSC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Zijin Mining i.e., Zijin Mining and CSSC Offshore go up and down completely randomly.
Pair Corralation between Zijin Mining and CSSC Offshore
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the CSSC Offshore. In addition to that, Zijin Mining is 1.45 times more volatile than CSSC Offshore Marine. It trades about -0.05 of its total potential returns per unit of risk. CSSC Offshore Marine is currently generating about -0.03 per unit of volatility. If you would invest 128.00 in CSSC Offshore Marine on October 12, 2024 and sell it today you would lose (2.00) from holding CSSC Offshore Marine or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. CSSC Offshore Marine
Performance |
| Timeline |
| Zijin Mining Group |
| CSSC Offshore Marine |
Zijin Mining and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and CSSC Offshore
The main advantage of trading using opposite Zijin Mining and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, CSSC 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.| Zijin Mining vs. SBI Insurance Group | Zijin Mining vs. ALBIS LEASING AG | Zijin Mining vs. Reinsurance Group of | Zijin Mining vs. Safety Insurance Group |
| CSSC Offshore vs. British American Tobacco | CSSC Offshore vs. SERI INDUSTRIAL EO | CSSC Offshore vs. Penta Ocean Construction Co | CSSC Offshore vs. Zijin Mining Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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