Correlation Between Zijin Mining and GBS Software
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and GBS Software 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 GBS Software 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 GBS Software AG, you can compare the effects of market volatilities on Zijin Mining and GBS Software 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 GBS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and GBS Software.
Diversification Opportunities for Zijin Mining and GBS Software
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and GBS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and GBS Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBS Software AG 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 GBS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBS Software AG has no effect on the direction of Zijin Mining i.e., Zijin Mining and GBS Software go up and down completely randomly.
Pair Corralation between Zijin Mining and GBS Software
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.31 times more return on investment than GBS Software. However, Zijin Mining is 1.31 times more volatile than GBS Software AG. It trades about 0.07 of its potential returns per unit of risk. GBS Software AG is currently generating about 0.04 per unit of risk. If you would invest 109.00 in Zijin Mining Group on October 16, 2024 and sell it today you would earn a total of 85.00 from holding Zijin Mining Group or generate 77.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. GBS Software AG
Performance |
| Timeline |
| Zijin Mining Group |
| GBS Software AG |
Zijin Mining and GBS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and GBS Software
The main advantage of trading using opposite Zijin Mining and GBS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, GBS Software 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 GBS Software will offset losses from the drop in GBS Software's long position.| Zijin Mining vs. VULCAN MATERIALS | Zijin Mining vs. Sims Metal Management | Zijin Mining vs. Vulcan Materials | Zijin Mining vs. Coor Service Management |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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