Correlation Between Zijin Mining and CME
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and CME 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 CME 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 CME Group, you can compare the effects of market volatilities on Zijin Mining and CME 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 CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and CME.
Diversification Opportunities for Zijin Mining and CME
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and CME is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME 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 CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of Zijin Mining i.e., Zijin Mining and CME go up and down completely randomly.
Pair Corralation between Zijin Mining and CME
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the CME. In addition to that, Zijin Mining is 2.33 times more volatile than CME Group. It trades about -0.03 of its total potential returns per unit of risk. CME Group is currently generating about 0.1 per unit of volatility. If you would invest 20,506 in CME Group on October 24, 2024 and sell it today you would earn a total of 1,714 from holding CME Group or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. CME Group
Performance |
| Timeline |
| Zijin Mining Group |
| CME Group |
Zijin Mining and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and CME
The main advantage of trading using opposite Zijin Mining and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| Zijin Mining vs. SPORTING | Zijin Mining vs. Casio Computer CoLtd | Zijin Mining vs. ecotel communication ag | Zijin Mining vs. NTG Nordic Transport |
| CME vs. COMBA TELECOM SYST | CME vs. Singapore Telecommunications Limited | CME vs. LANDSEA GREEN MANAGEMENT | CME vs. Charter Communications |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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