Correlation Between Nexstar Media and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Nexstar Media 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 Nexstar Media and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexstar Media Group and Zijin Mining Group, you can compare the effects of market volatilities on Nexstar Media 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 Nexstar Media with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexstar Media and Zijin Mining.
Diversification Opportunities for Nexstar Media and Zijin Mining
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nexstar and Zijin is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nexstar Media Group 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 Nexstar Media 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 Nexstar Media Group 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 Nexstar Media i.e., Nexstar Media and Zijin Mining go up and down completely randomly.
Pair Corralation between Nexstar Media and Zijin Mining
Assuming the 90 days horizon Nexstar Media Group is expected to generate 0.38 times more return on investment than Zijin Mining. However, Nexstar Media Group is 2.64 times less risky than Zijin Mining. It trades about -0.11 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.05 per unit of risk. If you would invest 15,980 in Nexstar Media Group on October 12, 2024 and sell it today you would lose (430.00) from holding Nexstar Media Group or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexstar Media Group vs. Zijin Mining Group
Performance |
| Timeline |
| Nexstar Media Group |
| Zijin Mining Group |
Nexstar Media and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexstar Media and Zijin Mining
The main advantage of trading using opposite Nexstar Media and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexstar Media 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.| Nexstar Media vs. Zijin Mining Group | Nexstar Media vs. Perseus Mining Limited | Nexstar Media vs. FIREWEED METALS P | Nexstar Media vs. BW OFFSHORE LTD |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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