Correlation Between Zijin Mining and Vonovia SE
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Vonovia SE 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 Vonovia SE 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 Vonovia SE, you can compare the effects of market volatilities on Zijin Mining and Vonovia SE 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 Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Vonovia SE.
Diversification Opportunities for Zijin Mining and Vonovia SE
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zijin and Vonovia is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Vonovia SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE 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 Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE has no effect on the direction of Zijin Mining i.e., Zijin Mining and Vonovia SE go up and down completely randomly.
Pair Corralation between Zijin Mining and Vonovia SE
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.44 times more return on investment than Vonovia SE. However, Zijin Mining is 1.44 times more volatile than Vonovia SE. It trades about 0.06 of its potential returns per unit of risk. Vonovia SE is currently generating about 0.04 per unit of risk. If you would invest 88.00 in Zijin Mining Group on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Zijin Mining Group or generate 101.14% 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. Vonovia SE
Performance |
| Timeline |
| Zijin Mining Group |
| Vonovia SE |
Zijin Mining and Vonovia SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Vonovia SE
The main advantage of trading using opposite Zijin Mining and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Vonovia SE 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 Vonovia SE will offset losses from the drop in Vonovia SE's long position.| Zijin Mining vs. ARISTOCRAT LEISURE | Zijin Mining vs. EAT WELL INVESTMENT | Zijin Mining vs. ePlay Digital | Zijin Mining vs. PennantPark Investment |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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