Correlation Between Ping An and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and Zijin Mining Group, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Zijin Mining.
Diversification Opportunities for Ping An and Zijin Mining
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ping and Zijin is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance 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 Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Zijin Mining go up and down completely randomly.
Pair Corralation between Ping An and Zijin Mining
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 0.75 times more return on investment than Zijin Mining. However, Ping An Insurance is 1.33 times less risky than Zijin Mining. It trades about -0.04 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.11 per unit of risk. If you would invest 584.00 in Ping An Insurance on August 24, 2024 and sell it today you would lose (19.00) from holding Ping An Insurance or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ping An Insurance vs. Zijin Mining Group
Performance |
| Timeline |
| Ping An Insurance |
| Zijin Mining Group |
Ping An and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Zijin Mining
The main advantage of trading using opposite Ping An and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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 Ping An Insurance 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. BHP Group Limited | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. NMI Holdings | Zijin Mining vs. Origin Agritech |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |