Correlation Between Zijin Mining and Warner Music
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Warner Music 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 Warner Music 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 Warner Music Group, you can compare the effects of market volatilities on Zijin Mining and Warner Music 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 Warner Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Warner Music.
Diversification Opportunities for Zijin Mining and Warner Music
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zijin and Warner is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Warner Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Music Group 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 Warner Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Music Group has no effect on the direction of Zijin Mining i.e., Zijin Mining and Warner Music go up and down completely randomly.
Pair Corralation between Zijin Mining and Warner Music
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.99 times more return on investment than Warner Music. However, Zijin Mining is 1.99 times more volatile than Warner Music Group. It trades about 0.14 of its potential returns per unit of risk. Warner Music Group is currently generating about -0.07 per unit of risk. If you would invest 167.00 in Zijin Mining Group on October 23, 2024 and sell it today you would earn a total of 12.00 from holding Zijin Mining Group or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Zijin Mining Group vs. Warner Music Group
Performance |
| Timeline |
| Zijin Mining Group |
| Warner Music Group |
Zijin Mining and Warner Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Warner Music
The main advantage of trading using opposite Zijin Mining and Warner Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Warner Music 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 Warner Music will offset losses from the drop in Warner Music's long position.| Zijin Mining vs. MARKET VECTR RETAIL | Zijin Mining vs. CHAMPION IRON | Zijin Mining vs. Mount Gibson Iron | Zijin Mining vs. AEON STORES |
| Warner Music vs. Broadwind | Warner Music vs. Monument Mining Limited | Warner Music vs. GALENA MINING LTD | Warner Music vs. Zijin Mining Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |