Correlation Between Zijin Mining and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Synchrony Financial 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 Synchrony Financial 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 Synchrony Financial, you can compare the effects of market volatilities on Zijin Mining and Synchrony Financial 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 Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Synchrony Financial.
Diversification Opportunities for Zijin Mining and Synchrony Financial
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zijin and Synchrony is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial 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 Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of Zijin Mining i.e., Zijin Mining and Synchrony Financial go up and down completely randomly.
Pair Corralation between Zijin Mining and Synchrony Financial
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.3 times more return on investment than Synchrony Financial. However, Zijin Mining is 1.3 times more volatile than Synchrony Financial. It trades about 0.12 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.09 per unit of risk. If you would invest 171.00 in Zijin Mining Group on November 2, 2024 and sell it today you would earn a total of 10.00 from holding Zijin Mining Group or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Synchrony Financial
Performance |
| Timeline |
| Zijin Mining Group |
| Synchrony Financial |
Zijin Mining and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Synchrony Financial
The main advantage of trading using opposite Zijin Mining and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Synchrony Financial 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 Synchrony Financial will offset losses from the drop in Synchrony Financial's long position.| Zijin Mining vs. BANK OF CHINA | Zijin Mining vs. Ameriprise Financial | Zijin Mining vs. Synovus Financial Corp | Zijin Mining vs. Webster Financial |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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