Correlation Between Zijin Mining and Japan Medical
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Japan Medical 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 Japan Medical 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 Japan Medical Dynamic, you can compare the effects of market volatilities on Zijin Mining and Japan Medical 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 Japan Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Japan Medical.
Diversification Opportunities for Zijin Mining and Japan Medical
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zijin and Japan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Japan Medical Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Medical Dynamic 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 Japan Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Medical Dynamic has no effect on the direction of Zijin Mining i.e., Zijin Mining and Japan Medical go up and down completely randomly.
Pair Corralation between Zijin Mining and Japan Medical
Assuming the 90 days horizon Zijin Mining Group is expected to generate 2.73 times more return on investment than Japan Medical. However, Zijin Mining is 2.73 times more volatile than Japan Medical Dynamic. It trades about 0.02 of its potential returns per unit of risk. Japan Medical Dynamic is currently generating about 0.01 per unit of risk. If you would invest 185.00 in Zijin Mining Group on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Zijin Mining Group or generate 0.54% 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. Japan Medical Dynamic
Performance |
| Timeline |
| Zijin Mining Group |
| Japan Medical Dynamic |
Zijin Mining and Japan Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Japan Medical
The main advantage of trading using opposite Zijin Mining and Japan Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Japan Medical 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 Japan Medical will offset losses from the drop in Japan Medical'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 |
| Japan Medical vs. Align Technology | Japan Medical vs. Superior Plus Corp | Japan Medical vs. SIVERS SEMICONDUCTORS AB | Japan Medical vs. Norsk Hydro ASA |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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