Correlation Between Zijin Mining and Textron
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Textron 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 Textron 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 Textron, you can compare the effects of market volatilities on Zijin Mining and Textron 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 Textron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Textron.
Diversification Opportunities for Zijin Mining and Textron
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zijin and Textron is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Textron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textron 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 Textron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textron has no effect on the direction of Zijin Mining i.e., Zijin Mining and Textron go up and down completely randomly.
Pair Corralation between Zijin Mining and Textron
Assuming the 90 days horizon Zijin Mining Group is expected to generate 3.1 times more return on investment than Textron. However, Zijin Mining is 3.1 times more volatile than Textron. It trades about -0.06 of its potential returns per unit of risk. Textron is currently generating about -0.32 per unit of risk. If you would invest 184.00 in Zijin Mining Group on October 7, 2024 and sell it today you would lose (8.00) from holding Zijin Mining Group or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Textron
Performance |
| Timeline |
| Zijin Mining Group |
| Textron |
Zijin Mining and Textron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Textron
The main advantage of trading using opposite Zijin Mining and Textron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Textron 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 Textron will offset losses from the drop in Textron's long position.| Zijin Mining vs. Vale SA | Zijin Mining vs. Glencore plc | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. NMI Holdings |
| Textron vs. ZURICH INSURANCE GROUP | Textron vs. UNIQA INSURANCE GR | Textron vs. Safety Insurance Group | Textron vs. UET United Electronic |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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