Correlation Between Zijin Mining and UMC Electronics
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and UMC Electronics 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 UMC Electronics 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 UMC Electronics Co, you can compare the effects of market volatilities on Zijin Mining and UMC Electronics 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 UMC Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and UMC Electronics.
Diversification Opportunities for Zijin Mining and UMC Electronics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zijin and UMC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and UMC Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMC Electronics 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 UMC Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMC Electronics has no effect on the direction of Zijin Mining i.e., Zijin Mining and UMC Electronics go up and down completely randomly.
Pair Corralation between Zijin Mining and UMC Electronics
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.19 times more return on investment than UMC Electronics. However, Zijin Mining is 1.19 times more volatile than UMC Electronics Co. It trades about 0.01 of its potential returns per unit of risk. UMC Electronics Co is currently generating about -0.03 per unit of risk. If you would invest 182.00 in Zijin Mining Group on September 1, 2024 and sell it today you would lose (5.00) from holding Zijin Mining Group or give up 2.75% 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. UMC Electronics Co
Performance |
| Timeline |
| Zijin Mining Group |
| UMC Electronics |
Zijin Mining and UMC Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and UMC Electronics
The main advantage of trading using opposite Zijin Mining and UMC Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, UMC Electronics 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 UMC Electronics will offset losses from the drop in UMC Electronics' long position.| Zijin Mining vs. Astral Foods Limited | Zijin Mining vs. GALENA MINING LTD | Zijin Mining vs. CN MODERN DAIRY | Zijin Mining vs. TYSON FOODS A |
| UMC Electronics vs. Perdoceo Education | UMC Electronics vs. IDP EDUCATION LTD | UMC Electronics vs. Boiron SA | UMC Electronics vs. Khiron Life Sciences |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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