Correlation Between Sea and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Sea 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 Sea and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Zijin Mining Group, you can compare the effects of market volatilities on Sea 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 Sea with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Zijin Mining.
Diversification Opportunities for Sea and Zijin Mining
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sea and Zijin is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sea 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 Sea 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 Sea 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 Sea i.e., Sea and Zijin Mining go up and down completely randomly.
Pair Corralation between Sea and Zijin Mining
Allowing for the 90-day total investment horizon Sea is expected to generate 1.01 times more return on investment than Zijin Mining. However, Sea is 1.01 times more volatile than Zijin Mining Group. It trades about 0.21 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.21 per unit of risk. If you would invest 9,926 in Sea on August 28, 2024 and sell it today you would earn a total of 1,474 from holding Sea or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. Zijin Mining Group
Performance |
| Timeline |
| Sea |
| Zijin Mining Group |
Sea and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Zijin Mining
The main advantage of trading using opposite Sea and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea 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.| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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