Correlation Between Zijin Mining and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on Zijin Mining and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Uber Technologies.
Diversification Opportunities for Zijin Mining and Uber Technologies
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Uber is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Zijin Mining i.e., Zijin Mining and Uber Technologies go up and down completely randomly.
Pair Corralation between Zijin Mining and Uber Technologies
Assuming the 90 days horizon Zijin Mining is expected to generate 1.98 times less return on investment than Uber Technologies. In addition to that, Zijin Mining is 1.83 times more volatile than Uber Technologies. It trades about 0.09 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.32 per unit of volatility. If you would invest 5,734 in Uber Technologies on October 14, 2024 and sell it today you would earn a total of 656.00 from holding Uber Technologies or generate 11.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Zijin Mining Group vs. Uber Technologies
Performance |
Timeline |
Zijin Mining Group |
Uber Technologies |
Zijin Mining and Uber Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zijin Mining and Uber Technologies
The main advantage of trading using opposite Zijin Mining and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.Zijin Mining vs. INDO RAMA SYNTHETIC | Zijin Mining vs. Columbia Sportswear | Zijin Mining vs. TRI CHEMICAL LABORATINC | Zijin Mining vs. PLAYMATES TOYS |
Uber Technologies vs. BORR DRILLING NEW | Uber Technologies vs. SWISS WATER DECAFFCOFFEE | Uber Technologies vs. Zijin Mining Group | Uber Technologies vs. INTER CARS SA |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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