Correlation Between Silver Mines and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Silver Mines 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 Silver Mines and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Mines Limited and Zijin Mining Group, you can compare the effects of market volatilities on Silver Mines 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 Silver Mines with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Mines and Zijin Mining.
Diversification Opportunities for Silver Mines and Zijin Mining
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Silver and Zijin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Silver Mines Limited 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 Silver Mines 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 Silver Mines Limited 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 Silver Mines i.e., Silver Mines and Zijin Mining go up and down completely randomly.
Pair Corralation between Silver Mines and Zijin Mining
Assuming the 90 days horizon Silver Mines Limited is expected to under-perform the Zijin Mining. In addition to that, Silver Mines is 2.33 times more volatile than Zijin Mining Group. It trades about -0.07 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 179.00 in Zijin Mining Group on September 25, 2024 and sell it today you would lose (12.00) from holding Zijin Mining Group or give up 6.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silver Mines Limited vs. Zijin Mining Group
Performance |
| Timeline |
| Silver Mines Limited |
| Zijin Mining Group |
Silver Mines and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silver Mines and Zijin Mining
The main advantage of trading using opposite Silver Mines and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Mines 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.| Silver Mines vs. Zijin Mining Group | Silver Mines vs. Ebro Foods SA | Silver Mines vs. ScanSource | Silver Mines vs. Suntory Beverage Food |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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