Correlation Between Zijin Mining and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Compania Cervecerias 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 Compania Cervecerias 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 Compania Cervecerias Unidas, you can compare the effects of market volatilities on Zijin Mining and Compania Cervecerias 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 Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Compania Cervecerias.
Diversification Opportunities for Zijin Mining and Compania Cervecerias
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Compania is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Zijin Mining i.e., Zijin Mining and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Zijin Mining and Compania Cervecerias
Assuming the 90 days horizon Zijin Mining Group is expected to generate 2.69 times more return on investment than Compania Cervecerias. However, Zijin Mining is 2.69 times more volatile than Compania Cervecerias Unidas. It trades about 0.05 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about -0.04 per unit of risk. If you would invest 116.00 in Zijin Mining Group on August 31, 2024 and sell it today you would earn a total of 67.00 from holding Zijin Mining Group or generate 57.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.43% |
| Values | Daily Returns |
Zijin Mining Group vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Zijin Mining Group |
| Compania Cervecerias |
Zijin Mining and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Compania Cervecerias
The main advantage of trading using opposite Zijin Mining and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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