Correlation Between Zijin Mining and HK Electric
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and HK Electric 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 HK Electric 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 HK Electric Investments, you can compare the effects of market volatilities on Zijin Mining and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and HK Electric.
Diversification Opportunities for Zijin Mining and HK Electric
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zijin and HKT is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of Zijin Mining i.e., Zijin Mining and HK Electric go up and down completely randomly.
Pair Corralation between Zijin Mining and HK Electric
Assuming the 90 days horizon Zijin Mining is expected to generate 1.48 times less return on investment than HK Electric. In addition to that, Zijin Mining is 1.09 times more volatile than HK Electric Investments. It trades about 0.07 of its total potential returns per unit of risk. HK Electric Investments is currently generating about 0.12 per unit of volatility. If you would invest 28.00 in HK Electric Investments on September 4, 2024 and sell it today you would earn a total of 35.00 from holding HK Electric Investments or generate 125.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. HK Electric Investments
Performance |
| Timeline |
| Zijin Mining Group |
| HK Electric Investments |
Zijin Mining and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and HK Electric
The main advantage of trading using opposite Zijin Mining and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| Zijin Mining vs. HK Electric Investments | Zijin Mining vs. PennantPark Investment | Zijin Mining vs. AUTO TRADER ADR | Zijin Mining vs. Canon Marketing Japan |
| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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