Correlation Between Zijin Mining and Lifeway Foods
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Lifeway Foods 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 Lifeway Foods 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 Lifeway Foods, you can compare the effects of market volatilities on Zijin Mining and Lifeway Foods 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 Lifeway Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Lifeway Foods.
Diversification Opportunities for Zijin Mining and Lifeway Foods
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Lifeway is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Lifeway Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeway Foods 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 Lifeway Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeway Foods has no effect on the direction of Zijin Mining i.e., Zijin Mining and Lifeway Foods go up and down completely randomly.
Pair Corralation between Zijin Mining and Lifeway Foods
Assuming the 90 days horizon Zijin Mining is expected to generate 1.77 times less return on investment than Lifeway Foods. But when comparing it to its historical volatility, Zijin Mining Group is 1.64 times less risky than Lifeway Foods. It trades about 0.07 of its potential returns per unit of risk. Lifeway Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Lifeway Foods on August 25, 2024 and sell it today you would earn a total of 1,060 from holding Lifeway Foods or generate 88.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Lifeway Foods
Performance |
| Timeline |
| Zijin Mining Group |
| Lifeway Foods |
Zijin Mining and Lifeway Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Lifeway Foods
The main advantage of trading using opposite Zijin Mining and Lifeway Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Lifeway Foods 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 Lifeway Foods will offset losses from the drop in Lifeway Foods' long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. NMI Holdings | Zijin Mining vs. Origin Agritech |
| Lifeway Foods vs. Superior Plus Corp | Lifeway Foods vs. NMI Holdings | Lifeway Foods vs. Origin Agritech | Lifeway Foods 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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