Correlation Between Zijin Mining and Pentair Plc
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Pentair Plc 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 Pentair Plc 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 Pentair plc, you can compare the effects of market volatilities on Zijin Mining and Pentair Plc 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 Pentair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Pentair Plc.
Diversification Opportunities for Zijin Mining and Pentair Plc
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and Pentair is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Pentair plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentair plc 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 Pentair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentair plc has no effect on the direction of Zijin Mining i.e., Zijin Mining and Pentair Plc go up and down completely randomly.
Pair Corralation between Zijin Mining and Pentair Plc
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.97 times more return on investment than Pentair Plc. However, Zijin Mining is 1.97 times more volatile than Pentair plc. It trades about 0.06 of its potential returns per unit of risk. Pentair plc is currently generating about 0.08 per unit of risk. If you would invest 95.00 in Zijin Mining Group on November 27, 2024 and sell it today you would earn a total of 89.00 from holding Zijin Mining Group or generate 93.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Pentair plc
Performance |
| Timeline |
| Zijin Mining Group |
| Pentair plc |
Zijin Mining and Pentair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Pentair Plc
The main advantage of trading using opposite Zijin Mining and Pentair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Pentair Plc 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 Pentair Plc will offset losses from the drop in Pentair Plc's long position.| Zijin Mining vs. MELIA HOTELS | Zijin Mining vs. Singapore Telecommunications Limited | Zijin Mining vs. Playa Hotels Resorts | Zijin Mining vs. Sunstone Hotel Investors |
| Pentair Plc vs. American Public Education | Pentair Plc vs. EMBARK EDUCATION LTD | Pentair Plc vs. Perdoceo Education | Pentair Plc vs. Laureate Education |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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