Correlation Between Safety Insurance and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Safety Insurance 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 Safety Insurance and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and Zijin Mining Group, you can compare the effects of market volatilities on Safety Insurance 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 Safety Insurance with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and Zijin Mining.
Diversification Opportunities for Safety Insurance and Zijin Mining
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Safety and Zijin is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance 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 Safety Insurance 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 Safety Insurance 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 Safety Insurance i.e., Safety Insurance and Zijin Mining go up and down completely randomly.
Pair Corralation between Safety Insurance and Zijin Mining
Assuming the 90 days horizon Safety Insurance is expected to generate 6.07 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, Safety Insurance Group is 2.06 times less risky than Zijin Mining. It trades about 0.02 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. Zijin Mining Group
Performance |
| Timeline |
| Safety Insurance |
| Zijin Mining Group |
Safety Insurance and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and Zijin Mining
The main advantage of trading using opposite Safety Insurance and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance 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.| Safety Insurance vs. PICC Property and | Safety Insurance vs. QBE Insurance Group | Safety Insurance vs. Superior Plus Corp | Safety Insurance vs. NMI Holdings |
| Zijin Mining vs. SBI Insurance Group | Zijin Mining vs. ALBIS LEASING AG | Zijin Mining vs. Reinsurance Group of | Zijin Mining vs. Safety Insurance Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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