Correlation Between Zijin Mining and Silver Mines
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Silver Mines 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 Silver Mines 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 Silver Mines Limited, you can compare the effects of market volatilities on Zijin Mining and Silver Mines 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 Silver Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Silver Mines.
Diversification Opportunities for Zijin Mining and Silver Mines
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zijin and Silver is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines Limited 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 Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of Zijin Mining i.e., Zijin Mining and Silver Mines go up and down completely randomly.
Pair Corralation between Zijin Mining and Silver Mines
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.39 times more return on investment than Silver Mines. However, Zijin Mining Group is 2.54 times less risky than Silver Mines. It trades about -0.09 of its potential returns per unit of risk. Silver Mines Limited is currently generating about -0.06 per unit of risk. If you would invest 179.00 in Zijin Mining Group on September 26, 2024 and sell it today you would lose (12.00) from holding Zijin Mining Group or give up 6.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Silver Mines Limited
Performance |
| Timeline |
| Zijin Mining Group |
| Silver Mines Limited |
Zijin Mining and Silver Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Silver Mines
The main advantage of trading using opposite Zijin Mining and Silver Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Silver Mines 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 Silver Mines will offset losses from the drop in Silver Mines' long position.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Rio Tinto Group |
| Silver Mines vs. Zijin Mining Group | Silver Mines vs. Ebro Foods SA | Silver Mines vs. ScanSource | Silver Mines vs. Suntory Beverage Food |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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