Correlation Between Zijin Mining and PulteGroup
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and PulteGroup 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 PulteGroup 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 PulteGroup, you can compare the effects of market volatilities on Zijin Mining and PulteGroup 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 PulteGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and PulteGroup.
Diversification Opportunities for Zijin Mining and PulteGroup
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and PulteGroup is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and PulteGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PulteGroup 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 PulteGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PulteGroup has no effect on the direction of Zijin Mining i.e., Zijin Mining and PulteGroup go up and down completely randomly.
Pair Corralation between Zijin Mining and PulteGroup
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the PulteGroup. In addition to that, Zijin Mining is 1.34 times more volatile than PulteGroup. It trades about -0.11 of its total potential returns per unit of risk. PulteGroup is currently generating about 0.18 per unit of volatility. If you would invest 11,702 in PulteGroup on August 30, 2024 and sell it today you would earn a total of 1,234 from holding PulteGroup or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zijin Mining Group vs. PulteGroup
Performance |
| Timeline |
| Zijin Mining Group |
| PulteGroup |
Zijin Mining and PulteGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and PulteGroup
The main advantage of trading using opposite Zijin Mining and PulteGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, PulteGroup 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 PulteGroup will offset losses from the drop in PulteGroup's long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Vale SA |
| PulteGroup vs. United Insurance Holdings | PulteGroup vs. Safety Insurance Group | PulteGroup vs. Zijin Mining Group | PulteGroup vs. GALENA MINING LTD |
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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