Correlation Between WT OFFSHORE and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both WT OFFSHORE 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 WT OFFSHORE and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT OFFSHORE and Zijin Mining Group, you can compare the effects of market volatilities on WT OFFSHORE 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 WT OFFSHORE with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT OFFSHORE and Zijin Mining.
Diversification Opportunities for WT OFFSHORE and Zijin Mining
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UWV and Zijin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE i.e., WT OFFSHORE and Zijin Mining go up and down completely randomly.
Pair Corralation between WT OFFSHORE and Zijin Mining
Assuming the 90 days trading horizon WT OFFSHORE is expected to under-perform the Zijin Mining. But the stock apears to be less risky and, when comparing its historical volatility, WT OFFSHORE is 1.02 times less risky than Zijin Mining. The stock trades about -0.06 of its potential returns per unit of risk. The Zijin Mining Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Zijin Mining Group on October 27, 2024 and sell it today you would earn a total of 83.00 from holding Zijin Mining Group or generate 87.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WT OFFSHORE vs. Zijin Mining Group
Performance |
| Timeline |
| WT OFFSHORE |
| Zijin Mining Group |
WT OFFSHORE and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WT OFFSHORE and Zijin Mining
The main advantage of trading using opposite WT OFFSHORE and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT OFFSHORE 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.| WT OFFSHORE vs. EIDESVIK OFFSHORE NK | WT OFFSHORE vs. Solstad Offshore ASA | WT OFFSHORE vs. GAMING FAC SA | WT OFFSHORE vs. Diamyd Medical AB |
| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Vale SA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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