Correlation Between Zijin Mining and China International
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and China International 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 China International 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 China International Marine, you can compare the effects of market volatilities on Zijin Mining and China International 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 China International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and China International.
Diversification Opportunities for Zijin Mining and China International
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zijin and China is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and China International Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China International 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 China International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China International has no effect on the direction of Zijin Mining i.e., Zijin Mining and China International go up and down completely randomly.
Pair Corralation between Zijin Mining and China International
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.73 times more return on investment than China International. However, Zijin Mining Group is 1.37 times less risky than China International. It trades about 0.01 of its potential returns per unit of risk. China International Marine is currently generating about -0.05 per unit of risk. If you would invest 180.00 in Zijin Mining Group on October 28, 2024 and sell it today you would lose (2.00) from holding Zijin Mining Group or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. China International Marine
Performance |
| Timeline |
| Zijin Mining Group |
| China International |
Zijin Mining and China International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and China International
The main advantage of trading using opposite Zijin Mining and China International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, China International 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 China International will offset losses from the drop in China International'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 |
| China International vs. Entravision Communications | China International vs. High Liner Foods | China International vs. Nomad Foods | China International vs. Iridium 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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