Correlation Between Zijin Mining and Nippon Steel
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Nippon Steel 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 Nippon Steel 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 Nippon Steel, you can compare the effects of market volatilities on Zijin Mining and Nippon Steel 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 Nippon Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Nippon Steel.
Diversification Opportunities for Zijin Mining and Nippon Steel
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zijin and Nippon is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Nippon Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Steel 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 Nippon Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Steel has no effect on the direction of Zijin Mining i.e., Zijin Mining and Nippon Steel go up and down completely randomly.
Pair Corralation between Zijin Mining and Nippon Steel
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Nippon Steel. In addition to that, Zijin Mining is 2.21 times more volatile than Nippon Steel. It trades about -0.07 of its total potential returns per unit of risk. Nippon Steel is currently generating about 0.09 per unit of volatility. If you would invest 1,846 in Nippon Steel on August 31, 2024 and sell it today you would earn a total of 55.00 from holding Nippon Steel or generate 2.98% 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. Nippon Steel
Performance |
| Timeline |
| Zijin Mining Group |
| Nippon Steel |
Zijin Mining and Nippon Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Nippon Steel
The main advantage of trading using opposite Zijin Mining and Nippon Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Nippon Steel 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 Nippon Steel will offset losses from the drop in Nippon Steel's long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Rio Tinto Group |
| Nippon Steel vs. SIVERS SEMICONDUCTORS AB | Nippon Steel vs. Darden Restaurants | Nippon Steel vs. Reliance Steel Aluminum | Nippon Steel vs. Q2M Managementberatung AG |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |