Correlation Between Sanyo Chemical and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical 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 Sanyo Chemical and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyo Chemical Industries and Zijin Mining Group, you can compare the effects of market volatilities on Sanyo Chemical 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 Sanyo Chemical with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Zijin Mining.
Diversification Opportunities for Sanyo Chemical and Zijin Mining
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sanyo and Zijin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries 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 Sanyo Chemical 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 Sanyo Chemical Industries 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 Sanyo Chemical i.e., Sanyo Chemical and Zijin Mining go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Zijin Mining
Assuming the 90 days horizon Sanyo Chemical Industries is expected to generate 0.45 times more return on investment than Zijin Mining. However, Sanyo Chemical Industries is 2.22 times less risky than Zijin Mining. It trades about 0.04 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.04 per unit of risk. If you would invest 2,440 in Sanyo Chemical Industries on September 19, 2024 and sell it today you would earn a total of 20.00 from holding Sanyo Chemical Industries or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Zijin Mining Group
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Zijin Mining Group |
Sanyo Chemical and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Zijin Mining
The main advantage of trading using opposite Sanyo Chemical and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical 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.| Sanyo Chemical vs. Albemarle | Sanyo Chemical vs. Superior Plus Corp | Sanyo Chemical vs. SIVERS SEMICONDUCTORS AB | Sanyo Chemical vs. Norsk Hydro ASA |
| Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Vale SA | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. SIVERS SEMICONDUCTORS AB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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