Correlation Between China BlueChemical and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both China BlueChemical 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 China BlueChemical and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China BlueChemical and Zijin Mining Group, you can compare the effects of market volatilities on China BlueChemical 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 China BlueChemical with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of China BlueChemical and Zijin Mining.
Diversification Opportunities for China BlueChemical and Zijin Mining
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Zijin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding China BlueChemical 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 China BlueChemical 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 China BlueChemical 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 China BlueChemical i.e., China BlueChemical and Zijin Mining go up and down completely randomly.
Pair Corralation between China BlueChemical and Zijin Mining
Assuming the 90 days horizon China BlueChemical is expected to generate 1.88 times less return on investment than Zijin Mining. In addition to that, China BlueChemical is 1.13 times more volatile than Zijin Mining Group. It trades about 0.03 of its total potential returns per unit of risk. Zijin Mining Group is currently generating about 0.06 per unit of volatility. If you would invest 84.00 in Zijin Mining Group on September 19, 2024 and sell it today you would earn a total of 87.00 from holding Zijin Mining Group or generate 103.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China BlueChemical vs. Zijin Mining Group
Performance |
| Timeline |
| China BlueChemical |
| Zijin Mining Group |
China BlueChemical and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China BlueChemical and Zijin Mining
The main advantage of trading using opposite China BlueChemical and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China BlueChemical 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.| China BlueChemical vs. Nissan Chemical Corp | China BlueChemical vs. UNITED RENTALS | China BlueChemical vs. PTT Global Chemical | China BlueChemical vs. MAVEN WIRELESS SWEDEN |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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