Correlation Between Zijin Mining and Transport International
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Transport International 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 Transport International 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 Transport International Holdings, you can compare the effects of market volatilities on Zijin Mining and Transport International 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Transport International.
Diversification Opportunities for Zijin Mining and Transport International
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Transport is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of Zijin Mining i.e., Zijin Mining and Transport International go up and down completely randomly.
Pair Corralation between Zijin Mining and Transport International
Assuming the 90 days horizon Zijin Mining Group is expected to generate 4.62 times more return on investment than Transport International. However, Zijin Mining is 4.62 times more volatile than Transport International Holdings. It trades about 0.12 of its potential returns per unit of risk. Transport International Holdings is currently generating about -0.07 per unit of risk. If you would invest 171.00 in Zijin Mining Group on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Zijin Mining Group or generate 7.6% 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. Transport International Holdin
Performance |
| Timeline |
| Zijin Mining Group |
| Transport International |
Zijin Mining and Transport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Transport International
The main advantage of trading using opposite Zijin Mining and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International'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 |
| Transport International vs. CSX Corporation | Transport International vs. Westinghouse Air Brake | Transport International vs. Superior Plus Corp | Transport International vs. SIVERS SEMICONDUCTORS AB |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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