Correlation Between Zijin Mining and MTRLimited
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and MTRLimited 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 MTRLimited 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 MTR Limited, you can compare the effects of market volatilities on Zijin Mining and MTRLimited 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 MTRLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and MTRLimited.
Diversification Opportunities for Zijin Mining and MTRLimited
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and MTRLimited is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and MTR Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTR Limited 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 MTRLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTR Limited has no effect on the direction of Zijin Mining i.e., Zijin Mining and MTRLimited go up and down completely randomly.
Pair Corralation between Zijin Mining and MTRLimited
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.29 times more return on investment than MTRLimited. However, Zijin Mining is 1.29 times more volatile than MTR Limited. It trades about 0.06 of its potential returns per unit of risk. MTR Limited is currently generating about 0.04 per unit of risk. If you would invest 109.00 in Zijin Mining Group on October 16, 2024 and sell it today you would earn a total of 85.00 from holding Zijin Mining Group or generate 77.98% 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. MTR Limited
Performance |
| Timeline |
| Zijin Mining Group |
| MTR Limited |
Zijin Mining and MTRLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and MTRLimited
The main advantage of trading using opposite Zijin Mining and MTRLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, MTRLimited 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 MTRLimited will offset losses from the drop in MTRLimited's long position.| Zijin Mining vs. GOODYEAR T RUBBER | Zijin Mining vs. Rayonier Advanced Materials | Zijin Mining vs. SIDETRADE EO 1 | Zijin Mining vs. The Yokohama Rubber |
| MTRLimited vs. Air Transport Services | MTRLimited vs. BROADPEAK SA EO | MTRLimited vs. Pebblebrook Hotel Trust | MTRLimited vs. Broadridge Financial Solutions |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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