Correlation Between Zijin Mining and FARO Technologies
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and FARO Technologies 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 FARO Technologies 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 FARO Technologies, you can compare the effects of market volatilities on Zijin Mining and FARO Technologies 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 FARO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and FARO Technologies.
Diversification Opportunities for Zijin Mining and FARO Technologies
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and FARO is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and FARO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARO Technologies 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 FARO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARO Technologies has no effect on the direction of Zijin Mining i.e., Zijin Mining and FARO Technologies go up and down completely randomly.
Pair Corralation between Zijin Mining and FARO Technologies
Assuming the 90 days horizon Zijin Mining Group is expected to generate 2.35 times more return on investment than FARO Technologies. However, Zijin Mining is 2.35 times more volatile than FARO Technologies. It trades about 0.06 of its potential returns per unit of risk. FARO Technologies is currently generating about 0.01 per unit of risk. If you would invest 93.00 in Zijin Mining Group on August 30, 2024 and sell it today you would earn a total of 103.00 from holding Zijin Mining Group or generate 110.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.71% |
| Values | Daily Returns |
Zijin Mining Group vs. FARO Technologies
Performance |
| Timeline |
| Zijin Mining Group |
| FARO Technologies |
Zijin Mining and FARO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and FARO Technologies
The main advantage of trading using opposite Zijin Mining and FARO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, FARO Technologies 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 FARO Technologies will offset losses from the drop in FARO Technologies' long position.| Zijin Mining vs. Vertiv Holdings Co | Zijin Mining vs. Nasdaq Inc | Zijin Mining vs. McDonalds | Zijin Mining vs. Walmart |
| FARO Technologies vs. Coherent | FARO Technologies vs. ESCO Technologies | FARO Technologies vs. Mesa Laboratories | FARO Technologies vs. Vishay Precision Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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