Correlation Between Zijin Mining and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Aluminumof China 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 Zijin Mining and Aluminumof China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zijin Mining Group and Aluminum of, you can compare the effects of market volatilities on Zijin Mining and Aluminumof China 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 Zijin Mining with a short position of Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Aluminumof China.
Diversification Opportunities for Zijin Mining and Aluminumof China
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Aluminumof is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China and Zijin Mining 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 Zijin Mining Group are associated (or correlated) with Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of Zijin Mining i.e., Zijin Mining and Aluminumof China go up and down completely randomly.
Pair Corralation between Zijin Mining and Aluminumof China
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.69 times more return on investment than Aluminumof China. However, Zijin Mining Group is 1.45 times less risky than Aluminumof China. It trades about -0.05 of its potential returns per unit of risk. Aluminum of is currently generating about -0.06 per unit of risk. If you would invest 225.00 in Zijin Mining Group on October 24, 2024 and sell it today you would lose (27.00) from holding Zijin Mining Group or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.61% |
| Values | Daily Returns |
Zijin Mining Group vs. Aluminum of
Performance |
| Timeline |
| Zijin Mining Group |
| Aluminumof China |
Zijin Mining and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Aluminumof China
The main advantage of trading using opposite Zijin Mining and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Aluminumof China 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| Zijin Mining vs. Torex Gold Resources | Zijin Mining vs. Wesdome Gold Mines | Zijin Mining vs. Northern Star Resources | Zijin Mining vs. Regis Resources |
| Aluminumof China vs. Air China Limited | Aluminumof China vs. COSCO SHIPPING Holdings | Aluminumof China vs. Zijin Mining Group | Aluminumof China vs. Bank of China |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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