Correlation Between Zijin Mining and Shoprite Holdings
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Shoprite Holdings 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 Shoprite Holdings 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 Shoprite Holdings Limited, you can compare the effects of market volatilities on Zijin Mining and Shoprite Holdings 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 Shoprite Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Shoprite Holdings.
Diversification Opportunities for Zijin Mining and Shoprite Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Shoprite is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Shoprite Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite Holdings 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 Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of Zijin Mining i.e., Zijin Mining and Shoprite Holdings go up and down completely randomly.
Pair Corralation between Zijin Mining and Shoprite Holdings
Assuming the 90 days horizon Zijin Mining is expected to generate 3.07 times less return on investment than Shoprite Holdings. But when comparing it to its historical volatility, Zijin Mining Group is 1.28 times less risky than Shoprite Holdings. It trades about 0.06 of its potential returns per unit of risk. Shoprite Holdings Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,061 in Shoprite Holdings Limited on September 12, 2024 and sell it today you would earn a total of 519.00 from holding Shoprite Holdings Limited or generate 48.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Shoprite Holdings Limited
Performance |
| Timeline |
| Zijin Mining Group |
| Shoprite Holdings |
Zijin Mining and Shoprite Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Shoprite Holdings
The main advantage of trading using opposite Zijin Mining and Shoprite Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Shoprite Holdings 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 Shoprite Holdings will offset losses from the drop in Shoprite Holdings' 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 |
| Shoprite Holdings vs. CDL INVESTMENT | Shoprite Holdings vs. SEI INVESTMENTS | Shoprite Holdings vs. EAT WELL INVESTMENT | Shoprite Holdings vs. PennyMac Mortgage Investment |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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