Correlation Between Zijin Mining and TREECOM
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and TREECOM 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 TREECOM 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 TREECOM, you can compare the effects of market volatilities on Zijin Mining and TREECOM 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 TREECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and TREECOM.
Diversification Opportunities for Zijin Mining and TREECOM
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and TREECOM is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and TREECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TREECOM 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 TREECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TREECOM has no effect on the direction of Zijin Mining i.e., Zijin Mining and TREECOM go up and down completely randomly.
Pair Corralation between Zijin Mining and TREECOM
Assuming the 90 days horizon Zijin Mining is expected to generate 1.08 times less return on investment than TREECOM. But when comparing it to its historical volatility, Zijin Mining Group is 1.43 times less risky than TREECOM. It trades about 0.07 of its potential returns per unit of risk. TREECOM is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,760 in TREECOM on September 12, 2024 and sell it today you would earn a total of 1,227 from holding TREECOM or generate 44.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Zijin Mining Group vs. TREECOM
Performance |
| Timeline |
| Zijin Mining Group |
| TREECOM |
Zijin Mining and TREECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and TREECOM
The main advantage of trading using opposite Zijin Mining and TREECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, TREECOM 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 TREECOM will offset losses from the drop in TREECOM'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 |
| TREECOM vs. DATAGROUP SE | TREECOM vs. GALENA MINING LTD | TREECOM vs. MINCO SILVER | TREECOM vs. Zijin Mining Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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