Correlation Between Zijin Mining and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY, you can compare the effects of market volatilities on Zijin Mining and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and SCOTT TECHNOLOGY.
Diversification Opportunities for Zijin Mining and SCOTT TECHNOLOGY
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zijin and SCOTT is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of Zijin Mining i.e., Zijin Mining and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between Zijin Mining and SCOTT TECHNOLOGY
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the SCOTT TECHNOLOGY. In addition to that, Zijin Mining is 1.96 times more volatile than SCOTT TECHNOLOGY. It trades about -0.05 of its total potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.04 per unit of volatility. If you would invest 117.00 in SCOTT TECHNOLOGY on October 11, 2024 and sell it today you would earn a total of 1.00 from holding SCOTT TECHNOLOGY or generate 0.85% 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. SCOTT TECHNOLOGY
Performance |
| Timeline |
| Zijin Mining Group |
| SCOTT TECHNOLOGY |
Zijin Mining and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and SCOTT TECHNOLOGY
The main advantage of trading using opposite Zijin Mining and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| Zijin Mining vs. Playa Hotels Resorts | Zijin Mining vs. Gaming and Leisure | Zijin Mining vs. Wyndham Hotels Resorts | Zijin Mining vs. Pebblebrook Hotel Trust |
| SCOTT TECHNOLOGY vs. Harmony Gold Mining | SCOTT TECHNOLOGY vs. FIREWEED METALS P | SCOTT TECHNOLOGY vs. Zijin Mining Group | SCOTT TECHNOLOGY vs. Jacquet Metal Service |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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