Correlation Between Origin Materials and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Origin Materials 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 Origin Materials and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Materials and Zijin Mining Group, you can compare the effects of market volatilities on Origin Materials 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 Origin Materials with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Materials and Zijin Mining.
Diversification Opportunities for Origin Materials and Zijin Mining
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Origin and Zijin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Origin Materials 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 Origin Materials 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 Origin Materials 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 Origin Materials i.e., Origin Materials and Zijin Mining go up and down completely randomly.
Pair Corralation between Origin Materials and Zijin Mining
Given the investment horizon of 90 days Origin Materials is expected to under-perform the Zijin Mining. In addition to that, Origin Materials is 2.68 times more volatile than Zijin Mining Group. It trades about -0.11 of its total potential returns per unit of risk. Zijin Mining Group is currently generating about 0.1 per unit of volatility. If you would invest 188.00 in Zijin Mining Group on November 29, 2024 and sell it today you would earn a total of 9.00 from holding Zijin Mining Group or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Materials vs. Zijin Mining Group
Performance |
| Timeline |
| Origin Materials |
| Zijin Mining Group |
Origin Materials and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Materials and Zijin Mining
The main advantage of trading using opposite Origin Materials and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Materials 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.| Origin Materials vs. Tronox Holdings PLC | Origin Materials vs. Valhi Inc | Origin Materials vs. Lsb Industries | Origin Materials vs. Huntsman |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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