Correlation Between Zijin Mining and TC Energy
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and TC Energy 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 TC Energy 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 TC Energy, you can compare the effects of market volatilities on Zijin Mining and TC Energy 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and TC Energy.
Diversification Opportunities for Zijin Mining and TC Energy
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zijin and TRS is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and TC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy has no effect on the direction of Zijin Mining i.e., Zijin Mining and TC Energy go up and down completely randomly.
Pair Corralation between Zijin Mining and TC Energy
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the TC Energy. In addition to that, Zijin Mining is 2.9 times more volatile than TC Energy. It trades about -0.09 of its total potential returns per unit of risk. TC Energy is currently generating about 0.26 per unit of volatility. If you would invest 4,268 in TC Energy on September 3, 2024 and sell it today you would earn a total of 305.00 from holding TC Energy or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. TC Energy
Performance |
| Timeline |
| Zijin Mining Group |
| TC Energy |
Zijin Mining and TC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and TC Energy
The main advantage of trading using opposite Zijin Mining and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, TC Energy 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 TC Energy will offset losses from the drop in TC Energy's long position.| Zijin Mining vs. ARISTOCRAT LEISURE | Zijin Mining vs. EAT WELL INVESTMENT | Zijin Mining vs. ePlay Digital | Zijin Mining vs. PennantPark Investment |
| TC Energy vs. ITALIAN WINE BRANDS | TC Energy vs. Marie Brizard Wine | TC Energy vs. NAKED WINES PLC | TC Energy vs. CHINA TONTINE WINES |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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