Correlation Between Zijin Mining and Southern
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Southern 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 Southern 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 The Southern, you can compare the effects of market volatilities on Zijin Mining and Southern 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 Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Southern.
Diversification Opportunities for Zijin Mining and Southern
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zijin and Southern is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and The Southern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern 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 Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern has no effect on the direction of Zijin Mining i.e., Zijin Mining and Southern go up and down completely randomly.
Pair Corralation between Zijin Mining and Southern
Assuming the 90 days horizon Zijin Mining Group is expected to generate 3.14 times more return on investment than Southern. However, Zijin Mining is 3.14 times more volatile than The Southern. It trades about 0.07 of its potential returns per unit of risk. The Southern is currently generating about 0.09 per unit of risk. If you would invest 113.00 in Zijin Mining Group on September 14, 2024 and sell it today you would earn a total of 71.00 from holding Zijin Mining Group or generate 62.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Zijin Mining Group vs. The Southern
Performance |
| Timeline |
| Zijin Mining Group |
| Southern |
Zijin Mining and Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Southern
The main advantage of trading using opposite Zijin Mining and Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Southern 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 Southern will offset losses from the drop in Southern's 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 |
| Southern vs. NextEra Energy | Southern vs. PGE Corporation | Southern vs. Xcel Energy | Southern vs. Consolidated Edison |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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