Correlation Between Zijin Mining and Mercedes Benz
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Mercedes Benz 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 Mercedes Benz 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 Mercedes Benz Group AG, you can compare the effects of market volatilities on Zijin Mining and Mercedes Benz 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 Mercedes Benz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Mercedes Benz.
Diversification Opportunities for Zijin Mining and Mercedes Benz
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Mercedes is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Mercedes Benz Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercedes Benz Group 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 Mercedes Benz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercedes Benz Group has no effect on the direction of Zijin Mining i.e., Zijin Mining and Mercedes Benz go up and down completely randomly.
Pair Corralation between Zijin Mining and Mercedes Benz
Assuming the 90 days horizon Zijin Mining is expected to generate 1.52 times less return on investment than Mercedes Benz. In addition to that, Zijin Mining is 2.15 times more volatile than Mercedes Benz Group AG. It trades about 0.07 of its total potential returns per unit of risk. Mercedes Benz Group AG is currently generating about 0.24 per unit of volatility. If you would invest 5,333 in Mercedes Benz Group AG on October 28, 2024 and sell it today you would earn a total of 347.00 from holding Mercedes Benz Group AG or generate 6.51% 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. Mercedes Benz Group AG
Performance |
Timeline |
Zijin Mining Group |
Mercedes Benz Group |
Zijin Mining and Mercedes Benz Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zijin Mining and Mercedes Benz
The main advantage of trading using opposite Zijin Mining and Mercedes Benz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Mercedes Benz 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 Mercedes Benz will offset losses from the drop in Mercedes Benz's long position.Zijin Mining vs. CarsalesCom | Zijin Mining vs. CSSC Offshore Marine | Zijin Mining vs. YATRA ONLINE DL 0001 | Zijin Mining vs. Major Drilling Group |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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