Correlation Between ZIJIN MINH and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both ZIJIN MINH and Barrick Gold 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 MINH and Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZIJIN MINH UNSPADR20 and Barrick Gold, you can compare the effects of market volatilities on ZIJIN MINH and Barrick Gold 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 MINH with a short position of Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZIJIN MINH and Barrick Gold.
Diversification Opportunities for ZIJIN MINH and Barrick Gold
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ZIJIN and Barrick is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ZIJIN MINH UNSPADR20 and Barrick Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold and ZIJIN MINH 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 MINH UNSPADR20 are associated (or correlated) with Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold has no effect on the direction of ZIJIN MINH i.e., ZIJIN MINH and Barrick Gold go up and down completely randomly.
Pair Corralation between ZIJIN MINH and Barrick Gold
Assuming the 90 days trading horizon ZIJIN MINH UNSPADR20 is expected to generate 1.41 times more return on investment than Barrick Gold. However, ZIJIN MINH is 1.41 times more volatile than Barrick Gold. It trades about 0.05 of its potential returns per unit of risk. Barrick Gold is currently generating about 0.02 per unit of risk. If you would invest 2,364 in ZIJIN MINH UNSPADR20 on September 4, 2024 and sell it today you would earn a total of 1,596 from holding ZIJIN MINH UNSPADR20 or generate 67.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
ZIJIN MINH UNSPADR20 vs. Barrick Gold
Performance |
| Timeline |
| ZIJIN MINH UNSPADR20 |
| Barrick Gold |
ZIJIN MINH and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZIJIN MINH and Barrick Gold
The main advantage of trading using opposite ZIJIN MINH and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZIJIN MINH position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| ZIJIN MINH vs. Barrick Gold | ZIJIN MINH vs. Superior Plus Corp | ZIJIN MINH vs. NMI Holdings | ZIJIN MINH vs. Origin Agritech |
| Barrick Gold vs. XLMedia PLC | Barrick Gold vs. Live Nation Entertainment | Barrick Gold vs. REMEDY ENTERTAINMENT OYJ | Barrick Gold vs. CNVISION MEDIA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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