Correlation Between Zijin Mining and Newcore Gold
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Newcore Gold 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 Newcore Gold 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 Newcore Gold, you can compare the effects of market volatilities on Zijin Mining and Newcore Gold 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 Newcore Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Newcore Gold.
Diversification Opportunities for Zijin Mining and Newcore Gold
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Newcore is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Newcore Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcore Gold 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 Newcore Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcore Gold has no effect on the direction of Zijin Mining i.e., Zijin Mining and Newcore Gold go up and down completely randomly.
Pair Corralation between Zijin Mining and Newcore Gold
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.75 times more return on investment than Newcore Gold. However, Zijin Mining is 1.75 times more volatile than Newcore Gold. It trades about 0.06 of its potential returns per unit of risk. Newcore Gold is currently generating about 0.04 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 Together |
| Strength | Significant |
| Accuracy | 90.71% |
| Values | Daily Returns |
Zijin Mining Group vs. Newcore Gold
Performance |
| Timeline |
| Zijin Mining Group |
| Newcore Gold |
Zijin Mining and Newcore Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Newcore Gold
The main advantage of trading using opposite Zijin Mining and Newcore Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Newcore Gold 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 Newcore Gold will offset losses from the drop in Newcore Gold's long position.| Zijin Mining vs. Vertiv Holdings Co | Zijin Mining vs. Nasdaq Inc | Zijin Mining vs. McDonalds | Zijin Mining vs. Walmart |
| Newcore Gold vs. Vertiv Holdings Co | Newcore Gold vs. Nasdaq Inc | Newcore Gold vs. McDonalds | Newcore Gold vs. Walmart |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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