Correlation Between Zijin Mining and Carsales
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Carsales 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 Carsales 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 CarsalesCom, you can compare the effects of market volatilities on Zijin Mining and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Carsales.
Diversification Opportunities for Zijin Mining and Carsales
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zijin and Carsales is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Zijin Mining i.e., Zijin Mining and Carsales go up and down completely randomly.
Pair Corralation between Zijin Mining and Carsales
Assuming the 90 days horizon Zijin Mining Group is expected to generate 2.0 times more return on investment than Carsales. However, Zijin Mining is 2.0 times more volatile than CarsalesCom. It trades about 0.06 of its potential returns per unit of risk. CarsalesCom is currently generating about 0.11 per unit of risk. If you would invest 111.00 in Zijin Mining Group on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Zijin Mining Group or generate 63.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. CarsalesCom
Performance |
| Timeline |
| Zijin Mining Group |
| CarsalesCom |
Zijin Mining and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Carsales
The main advantage of trading using opposite Zijin Mining and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. NMI Holdings | Zijin Mining vs. Origin Agritech | Zijin Mining vs. SIVERS SEMICONDUCTORS AB |
| Carsales vs. CapitaLand Investment Limited | Carsales vs. Genco Shipping Trading | Carsales vs. MGIC INVESTMENT | Carsales vs. WisdomTree Investments |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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