Correlation Between Zijin Mining and Sanyo Chemical
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Sanyo Chemical 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 Sanyo Chemical 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 Sanyo Chemical Industries, you can compare the effects of market volatilities on Zijin Mining and Sanyo Chemical 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 Sanyo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Sanyo Chemical.
Diversification Opportunities for Zijin Mining and Sanyo Chemical
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zijin and Sanyo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Sanyo Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Chemical Industries 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 Sanyo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Chemical Industries has no effect on the direction of Zijin Mining i.e., Zijin Mining and Sanyo Chemical go up and down completely randomly.
Pair Corralation between Zijin Mining and Sanyo Chemical
Assuming the 90 days horizon Zijin Mining Group is expected to generate 2.51 times more return on investment than Sanyo Chemical. However, Zijin Mining is 2.51 times more volatile than Sanyo Chemical Industries. It trades about 0.05 of its potential returns per unit of risk. Sanyo Chemical Industries is currently generating about -0.02 per unit of risk. If you would invest 98.00 in Zijin Mining Group on September 19, 2024 and sell it today you would earn a total of 75.00 from holding Zijin Mining Group or generate 76.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Sanyo Chemical Industries
Performance |
| Timeline |
| Zijin Mining Group |
| Sanyo Chemical Industries |
Zijin Mining and Sanyo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Sanyo Chemical
The main advantage of trading using opposite Zijin Mining and Sanyo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Sanyo Chemical 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 Sanyo Chemical will offset losses from the drop in Sanyo Chemical'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 |
| Sanyo Chemical vs. Albemarle | Sanyo Chemical vs. Superior Plus Corp | Sanyo Chemical vs. SIVERS SEMICONDUCTORS AB | Sanyo Chemical vs. Norsk Hydro ASA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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