Correlation Between ZIJIN MINH and Newmont
Can any of the company-specific risk be diversified away by investing in both ZIJIN MINH and Newmont 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 Newmont 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 Newmont, you can compare the effects of market volatilities on ZIJIN MINH and Newmont 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 Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZIJIN MINH and Newmont.
Diversification Opportunities for ZIJIN MINH and Newmont
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ZIJIN and Newmont is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ZIJIN MINH UNSPADR20 and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont 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 Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of ZIJIN MINH i.e., ZIJIN MINH and Newmont go up and down completely randomly.
Pair Corralation between ZIJIN MINH and Newmont
Assuming the 90 days trading horizon ZIJIN MINH UNSPADR20 is expected to under-perform the Newmont. In addition to that, ZIJIN MINH is 1.4 times more volatile than Newmont. It trades about -0.01 of its total potential returns per unit of risk. Newmont is currently generating about 0.0 per unit of volatility. If you would invest 3,807 in Newmont on September 24, 2024 and sell it today you would lose (118.00) from holding Newmont or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZIJIN MINH UNSPADR20 vs. Newmont
Performance |
| Timeline |
| ZIJIN MINH UNSPADR20 |
| Newmont |
ZIJIN MINH and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZIJIN MINH and Newmont
The main advantage of trading using opposite ZIJIN MINH and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZIJIN MINH position performs unexpectedly, Newmont 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 Newmont will offset losses from the drop in Newmont's long position.| ZIJIN MINH vs. Newmont | ZIJIN MINH vs. Barrick Gold | ZIJIN MINH vs. Franco Nevada | ZIJIN MINH vs. Agnico Eagle Mines |
| Newmont vs. ZIJIN MINH UNSPADR20 | Newmont vs. Barrick Gold | Newmont vs. Franco Nevada | Newmont vs. Agnico Eagle Mines |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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