Correlation Between Reinsurance Group and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group 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 Reinsurance Group and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and Zijin Mining Group, you can compare the effects of market volatilities on Reinsurance Group 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 Reinsurance Group with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Zijin Mining.
Diversification Opportunities for Reinsurance Group and Zijin Mining
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Reinsurance and Zijin is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of 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 Reinsurance Group 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 Reinsurance Group of 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 Reinsurance Group i.e., Reinsurance Group and Zijin Mining go up and down completely randomly.
Pair Corralation between Reinsurance Group and Zijin Mining
Assuming the 90 days trading horizon Reinsurance Group is expected to generate 1.39 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, Reinsurance Group of is 1.95 times less risky than Zijin Mining. It trades about 0.07 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Zijin Mining Group on October 12, 2024 and sell it today you would earn a total of 77.00 from holding Zijin Mining Group or generate 77.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. Zijin Mining Group
Performance |
| Timeline |
| Reinsurance Group |
| Zijin Mining Group |
Reinsurance Group and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Zijin Mining
The main advantage of trading using opposite Reinsurance Group and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group 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.| Reinsurance Group vs. MUENCHRUECKUNSADR 110 | Reinsurance Group vs. China Reinsurance | Reinsurance Group vs. Superior Plus Corp | Reinsurance Group vs. NMI Holdings |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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