Correlation Between Marchex and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Marchex 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 Marchex and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marchex and Zijin Mining Group, you can compare the effects of market volatilities on Marchex 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 Marchex with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marchex and Zijin Mining.
Diversification Opportunities for Marchex and Zijin Mining
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Marchex and Zijin is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Marchex 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 Marchex 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 Marchex 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 Marchex i.e., Marchex and Zijin Mining go up and down completely randomly.
Pair Corralation between Marchex and Zijin Mining
Given the investment horizon of 90 days Marchex is expected to generate 9.87 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, Marchex is 2.68 times less risky than Zijin Mining. It trades about 0.02 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 90.00 in Zijin Mining Group on September 3, 2024 and sell it today you would earn a total of 101.00 from holding Zijin Mining Group or generate 112.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.71% |
| Values | Daily Returns |
Marchex vs. Zijin Mining Group
Performance |
| Timeline |
| Marchex |
| Zijin Mining Group |
Marchex and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marchex and Zijin Mining
The main advantage of trading using opposite Marchex and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marchex 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.| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
| Zijin Mining vs. Harmony Gold Mining | Zijin Mining vs. SPACE | Zijin Mining vs. T Rowe Price | Zijin Mining vs. Ampleforth |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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