Correlation Between Zijin Mining and Balchem
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Balchem 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 Balchem 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 Balchem, you can compare the effects of market volatilities on Zijin Mining and Balchem 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 Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Balchem.
Diversification Opportunities for Zijin Mining and Balchem
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and Balchem is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem 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 Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of Zijin Mining i.e., Zijin Mining and Balchem go up and down completely randomly.
Pair Corralation between Zijin Mining and Balchem
Assuming the 90 days horizon Zijin Mining Group is expected to generate 3.22 times more return on investment than Balchem. However, Zijin Mining is 3.22 times more volatile than Balchem. It trades about 0.05 of its potential returns per unit of risk. Balchem is currently generating about 0.07 per unit of risk. If you would invest 111.00 in Zijin Mining Group on August 31, 2024 and sell it today you would earn a total of 72.00 from holding Zijin Mining Group or generate 64.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.32% |
| Values | Daily Returns |
Zijin Mining Group vs. Balchem
Performance |
| Timeline |
| Zijin Mining Group |
| Balchem |
Zijin Mining and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Balchem
The main advantage of trading using opposite Zijin Mining and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem'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 |
| Balchem vs. Eastman Chemical | Balchem vs. Air Products and | Balchem vs. Linde plc Ordinary | Balchem vs. Ecolab Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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