Correlation Between Wheaton Precious and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Zijin Mining Group, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Zijin Mining.
Diversification Opportunities for Wheaton Precious and Zijin Mining
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wheaton and Zijin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals 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 Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Zijin Mining go up and down completely randomly.
Pair Corralation between Wheaton Precious and Zijin Mining
Considering the 90-day investment horizon Wheaton Precious Metals is expected to generate 0.66 times more return on investment than Zijin Mining. However, Wheaton Precious Metals is 1.52 times less risky than Zijin Mining. It trades about 0.1 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.06 per unit of risk. If you would invest 5,737 in Wheaton Precious Metals on October 25, 2024 and sell it today you would earn a total of 160.00 from holding Wheaton Precious Metals or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Zijin Mining Group
Performance |
| Timeline |
| Wheaton Precious Metals |
| Zijin Mining Group |
Wheaton Precious and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Zijin Mining
The main advantage of trading using opposite Wheaton Precious and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Royal Gold | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Sandstorm Gold Ltd | Wheaton Precious vs. Osisko Gold Ro |
| Zijin Mining vs. AngloGold Ashanti plc | Zijin Mining vs. Harmony Gold Mining | Zijin Mining vs. Eldorado Gold Corp | Zijin Mining vs. Kinross Gold |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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