Correlation Between Fair Isaac and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Fair Isaac and Zijin Mining 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 Fair Isaac and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fair Isaac Corp and Zijin Mining Group, you can compare the effects of market volatilities on Fair Isaac and Zijin Mining 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 Fair Isaac with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Isaac and Zijin Mining.
Diversification Opportunities for Fair Isaac and Zijin Mining
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fair and Zijin is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac Corp and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group and Fair Isaac 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 Fair Isaac Corp are associated (or correlated) with Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Fair Isaac i.e., Fair Isaac and Zijin Mining go up and down completely randomly.
Pair Corralation between Fair Isaac and Zijin Mining
Assuming the 90 days trading horizon Fair Isaac Corp is expected to generate 0.63 times more return on investment than Zijin Mining. However, Fair Isaac Corp is 1.59 times less risky than Zijin Mining. It trades about 0.15 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.07 per unit of risk. If you would invest 103,000 in Fair Isaac Corp on September 14, 2024 and sell it today you would earn a total of 108,600 from holding Fair Isaac Corp or generate 105.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fair Isaac Corp vs. Zijin Mining Group
Performance |
| Timeline |
| Fair Isaac Corp |
| Zijin Mining Group |
Fair Isaac and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fair Isaac and Zijin Mining
The main advantage of trading using opposite Fair Isaac and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Isaac position performs unexpectedly, Zijin Mining 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.The idea behind Fair Isaac Corp and Zijin Mining Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Vale SA | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. SIVERS SEMICONDUCTORS AB |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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