Correlation Between Nasdaq and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Nasdaq 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 Nasdaq and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Zijin Mining Group, you can compare the effects of market volatilities on Nasdaq 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 Nasdaq with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Zijin Mining.
Diversification Opportunities for Nasdaq and Zijin Mining
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nasdaq and Zijin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and Zijin Mining go up and down completely randomly.
Pair Corralation between Nasdaq and Zijin Mining
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.33 times more return on investment than Zijin Mining. However, Nasdaq Inc is 3.0 times less risky than Zijin Mining. It trades about 0.39 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.18 per unit of risk. If you would invest 7,534 in Nasdaq Inc on August 29, 2024 and sell it today you would earn a total of 731.00 from holding Nasdaq Inc or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nasdaq Inc vs. Zijin Mining Group
Performance |
| Timeline |
| Nasdaq Inc |
| Zijin Mining Group |
Nasdaq and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Zijin Mining
The main advantage of trading using opposite Nasdaq and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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. Vertiv Holdings Co | Zijin Mining vs. Nasdaq Inc | Zijin Mining vs. McDonalds | Zijin Mining vs. Walmart |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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