Correlation Between KINGBOARD CHEMICAL and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Zijin Mining Group, you can compare the effects of market volatilities on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Zijin Mining.
Diversification Opportunities for KINGBOARD CHEMICAL and Zijin Mining
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KINGBOARD and Zijin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Zijin Mining go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Zijin Mining
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 1.12 times more return on investment than Zijin Mining. However, KINGBOARD CHEMICAL is 1.12 times more volatile than Zijin Mining Group. It trades about 0.05 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.06 per unit of risk. If you would invest 114.00 in KINGBOARD CHEMICAL on September 19, 2024 and sell it today you would earn a total of 110.00 from holding KINGBOARD CHEMICAL or generate 96.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Zijin Mining Group
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Zijin Mining Group |
KINGBOARD CHEMICAL and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Zijin Mining
The main advantage of trading using opposite KINGBOARD CHEMICAL and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL 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.| KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Microsoft |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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