Correlation Between Zijin Mining and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and FIREWEED METALS 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 FIREWEED METALS 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 FIREWEED METALS P, you can compare the effects of market volatilities on Zijin Mining and FIREWEED METALS 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 FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and FIREWEED METALS.
Diversification Opportunities for Zijin Mining and FIREWEED METALS
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zijin and FIREWEED is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P 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 FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of Zijin Mining i.e., Zijin Mining and FIREWEED METALS go up and down completely randomly.
Pair Corralation between Zijin Mining and FIREWEED METALS
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.88 times more return on investment than FIREWEED METALS. However, Zijin Mining Group is 1.14 times less risky than FIREWEED METALS. It trades about 0.05 of its potential returns per unit of risk. FIREWEED METALS P is currently generating about 0.05 per unit of risk. If you would invest 95.00 in Zijin Mining Group on October 27, 2024 and sell it today you would earn a total of 83.00 from holding Zijin Mining Group or generate 87.37% 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. FIREWEED METALS P
Performance |
| Timeline |
| Zijin Mining Group |
| FIREWEED METALS P |
Zijin Mining and FIREWEED METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and FIREWEED METALS
The main advantage of trading using opposite Zijin Mining and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Vale SA |
| FIREWEED METALS vs. Rio Tinto Group | FIREWEED METALS vs. Anglo American plc | FIREWEED METALS vs. Mineral Resources Limited | FIREWEED METALS vs. NEXA RESOURCES SA |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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