Correlation Between Zijin Mining and Waste Management
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Waste Management 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 Waste Management 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 Waste Management, you can compare the effects of market volatilities on Zijin Mining and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Waste Management.
Diversification Opportunities for Zijin Mining and Waste Management
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zijin and Waste is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of Zijin Mining i.e., Zijin Mining and Waste Management go up and down completely randomly.
Pair Corralation between Zijin Mining and Waste Management
Assuming the 90 days horizon Zijin Mining Group is expected to generate 2.94 times more return on investment than Waste Management. However, Zijin Mining is 2.94 times more volatile than Waste Management. It trades about 0.07 of its potential returns per unit of risk. Waste Management is currently generating about 0.1 per unit of risk. If you would invest 116.00 in Zijin Mining Group on September 12, 2024 and sell it today you would earn a total of 70.00 from holding Zijin Mining Group or generate 60.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Zijin Mining Group vs. Waste Management
Performance |
| Timeline |
| Zijin Mining Group |
| Waste Management |
Zijin Mining and Waste Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Waste Management
The main advantage of trading using opposite Zijin Mining and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management'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 |
| Waste Management vs. Harmony Gold Mining | Waste Management vs. Canadian Utilities Limited | Waste Management vs. Zijin Mining Group | Waste Management vs. GRIFFIN MINING LTD |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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