Correlation Between Zijin Mining and Corporacion America
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Corporacion America 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 Corporacion America 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 Corporacion America Airports, you can compare the effects of market volatilities on Zijin Mining and Corporacion America 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 Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Corporacion America.
Diversification Opportunities for Zijin Mining and Corporacion America
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zijin and Corporacion is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of Zijin Mining i.e., Zijin Mining and Corporacion America go up and down completely randomly.
Pair Corralation between Zijin Mining and Corporacion America
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.66 times more return on investment than Corporacion America. However, Zijin Mining is 1.66 times more volatile than Corporacion America Airports. It trades about 0.01 of its potential returns per unit of risk. Corporacion America Airports is currently generating about 0.02 per unit of risk. If you would invest 206.00 in Zijin Mining Group on November 28, 2024 and sell it today you would lose (9.00) from holding Zijin Mining Group or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 79.78% |
| Values | Daily Returns |
Zijin Mining Group vs. Corporacion America Airports
Performance |
| Timeline |
| Zijin Mining Group |
| Corporacion America |
Zijin Mining and Corporacion America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Corporacion America
The main advantage of trading using opposite Zijin Mining and Corporacion America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Corporacion America 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 Corporacion America will offset losses from the drop in Corporacion America'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 |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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