Correlation Between Zijin Mining and Alta Equipment
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Alta Equipment 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 Alta Equipment 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 Alta Equipment Group, you can compare the effects of market volatilities on Zijin Mining and Alta Equipment 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 Alta Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Alta Equipment.
Diversification Opportunities for Zijin Mining and Alta Equipment
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and Alta is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Alta Equipment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Equipment Group 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 Alta Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Equipment Group has no effect on the direction of Zijin Mining i.e., Zijin Mining and Alta Equipment go up and down completely randomly.
Pair Corralation between Zijin Mining and Alta Equipment
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Alta Equipment. But the pink sheet apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 1.17 times less risky than Alta Equipment. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Alta Equipment Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 640.00 in Alta Equipment Group on August 31, 2024 and sell it today you would earn a total of 134.00 from holding Alta Equipment Group or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Alta Equipment Group
Performance |
| Timeline |
| Zijin Mining Group |
| Alta Equipment Group |
Zijin Mining and Alta Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Alta Equipment
The main advantage of trading using opposite Zijin Mining and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Alta Equipment 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 Alta Equipment will offset losses from the drop in Alta Equipment'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 |
| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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