Correlation Between NET Power and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both NET Power 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 NET Power and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NET Power and Zijin Mining Group, you can compare the effects of market volatilities on NET Power 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 NET Power with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NET Power and Zijin Mining.
Diversification Opportunities for NET Power and Zijin Mining
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NET and Zijin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NET Power 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 NET Power 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 NET Power 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 NET Power i.e., NET Power and Zijin Mining go up and down completely randomly.
Pair Corralation between NET Power and Zijin Mining
Given the investment horizon of 90 days NET Power is expected to generate 1.92 times more return on investment than Zijin Mining. However, NET Power is 1.92 times more volatile than Zijin Mining Group. It trades about 0.25 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.15 per unit of risk. If you would invest 886.00 in NET Power on September 4, 2024 and sell it today you would earn a total of 328.00 from holding NET Power or generate 37.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NET Power vs. Zijin Mining Group
Performance |
| Timeline |
| NET Power |
| Zijin Mining Group |
NET Power and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NET Power and Zijin Mining
The main advantage of trading using opposite NET Power and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NET Power 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.| NET Power vs. Zijin Mining Group | NET Power vs. NextNav Warrant | NET Power vs. Mind Technology | NET Power vs. Evolution Mining |
| Zijin Mining vs. Torex Gold Resources | Zijin Mining vs. Wesdome Gold Mines | Zijin Mining vs. Northern Star Resources | Zijin Mining vs. Regis Resources |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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