Correlation Between Zijin Mining and Penta Ocean
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Penta Ocean 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 Penta Ocean 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 Penta Ocean Construction Co, you can compare the effects of market volatilities on Zijin Mining and Penta Ocean 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 Penta Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Penta Ocean.
Diversification Opportunities for Zijin Mining and Penta Ocean
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zijin and Penta is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Penta Ocean Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penta Ocean Construc 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 Penta Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penta Ocean Construc has no effect on the direction of Zijin Mining i.e., Zijin Mining and Penta Ocean go up and down completely randomly.
Pair Corralation between Zijin Mining and Penta Ocean
Assuming the 90 days horizon Zijin Mining Group is expected to generate 3.08 times more return on investment than Penta Ocean. However, Zijin Mining is 3.08 times more volatile than Penta Ocean Construction Co. It trades about 0.0 of its potential returns per unit of risk. Penta Ocean Construction Co is currently generating about -0.03 per unit of risk. If you would invest 188.00 in Zijin Mining Group on September 2, 2024 and sell it today you would lose (11.00) from holding Zijin Mining Group or give up 5.85% 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. Penta Ocean Construction Co
Performance |
| Timeline |
| Zijin Mining Group |
| Penta Ocean Construc |
Zijin Mining and Penta Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Penta Ocean
The main advantage of trading using opposite Zijin Mining and Penta Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Penta Ocean 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 Penta Ocean will offset losses from the drop in Penta Ocean's long position.| Zijin Mining vs. REVO INSURANCE SPA | Zijin Mining vs. WillScot Mobile Mini | Zijin Mining vs. COMINTL BANK ADR1 | Zijin Mining vs. Ribbon Communications |
| Penta Ocean vs. Transurban Group | Penta Ocean vs. Jiangsu Expressway | Penta Ocean vs. Zhejiang Expressway Co | Penta Ocean vs. Arcosa Inc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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