Correlation Between Zijin Mining and Russel Metals
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Russel Metals 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 Russel Metals 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 Russel Metals, you can compare the effects of market volatilities on Zijin Mining and Russel Metals 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 Russel Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Russel Metals.
Diversification Opportunities for Zijin Mining and Russel Metals
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zijin and Russel is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Russel Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russel Metals 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 Russel Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russel Metals has no effect on the direction of Zijin Mining i.e., Zijin Mining and Russel Metals go up and down completely randomly.
Pair Corralation between Zijin Mining and Russel Metals
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.98 times more return on investment than Russel Metals. However, Zijin Mining is 1.98 times more volatile than Russel Metals. It trades about 0.06 of its potential returns per unit of risk. Russel Metals is currently generating about 0.05 per unit of risk. If you would invest 111.00 in Zijin Mining Group on September 12, 2024 and sell it today you would earn a total of 75.00 from holding Zijin Mining Group or generate 67.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Zijin Mining Group vs. Russel Metals
Performance |
| Timeline |
| Zijin Mining Group |
| Russel Metals |
Zijin Mining and Russel Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Russel Metals
The main advantage of trading using opposite Zijin Mining and Russel Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Russel Metals 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 Russel Metals will offset losses from the drop in Russel Metals' long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Vale SA | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. SIVERS SEMICONDUCTORS AB |
| Russel Metals vs. Zijin Mining Group | Russel Metals vs. KINGBOARD CHEMICAL | Russel Metals vs. ADRIATIC METALS LS 013355 | Russel Metals vs. Harmony Gold Mining |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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