Correlation Between Zijin Mining and Sea
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Sea 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 Sea 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 Sea, you can compare the effects of market volatilities on Zijin Mining and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Sea.
Diversification Opportunities for Zijin Mining and Sea
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zijin and Sea is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Zijin Mining i.e., Zijin Mining and Sea go up and down completely randomly.
Pair Corralation between Zijin Mining and Sea
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Sea. But the pink sheet apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 1.01 times less risky than Sea. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Sea is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 9,926 in Sea on August 28, 2024 and sell it today you would earn a total of 1,474 from holding Sea or generate 14.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Sea
Performance |
| Timeline |
| Zijin Mining Group |
| Sea |
Zijin Mining and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Sea
The main advantage of trading using opposite Zijin Mining and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea'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 |
| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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