Correlation Between GEAR4MUSIC and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both GEAR4MUSIC 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 GEAR4MUSIC and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEAR4MUSIC LS 10 and Zijin Mining Group, you can compare the effects of market volatilities on GEAR4MUSIC 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 GEAR4MUSIC with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEAR4MUSIC and Zijin Mining.
Diversification Opportunities for GEAR4MUSIC and Zijin Mining
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEAR4MUSIC and Zijin is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GEAR4MUSIC LS 10 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 GEAR4MUSIC 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 GEAR4MUSIC LS 10 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 GEAR4MUSIC i.e., GEAR4MUSIC and Zijin Mining go up and down completely randomly.
Pair Corralation between GEAR4MUSIC and Zijin Mining
Assuming the 90 days horizon GEAR4MUSIC is expected to generate 1.74 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, GEAR4MUSIC LS 10 is 1.0 times less risky than Zijin Mining. It trades about 0.03 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Zijin Mining Group on August 26, 2024 and sell it today you would earn a total of 96.00 from holding Zijin Mining Group or generate 110.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEAR4MUSIC LS 10 vs. Zijin Mining Group
Performance |
| Timeline |
| GEAR4MUSIC LS 10 |
| Zijin Mining Group |
GEAR4MUSIC and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEAR4MUSIC and Zijin Mining
The main advantage of trading using opposite GEAR4MUSIC and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEAR4MUSIC 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.| GEAR4MUSIC vs. Sunny Optical Technology | GEAR4MUSIC vs. Western Copper and | GEAR4MUSIC vs. SCOTT TECHNOLOGY | GEAR4MUSIC vs. Firan Technology Group |
| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. NMI Holdings | Zijin Mining vs. Origin Agritech |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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