Correlation Between Zijin Mining and Shake Shack
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Shake Shack 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 Shake Shack 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 Shake Shack, you can compare the effects of market volatilities on Zijin Mining and Shake Shack 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 Shake Shack. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Shake Shack.
Diversification Opportunities for Zijin Mining and Shake Shack
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zijin and Shake is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Shake Shack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shake Shack 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 Shake Shack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shake Shack has no effect on the direction of Zijin Mining i.e., Zijin Mining and Shake Shack go up and down completely randomly.
Pair Corralation between Zijin Mining and Shake Shack
Assuming the 90 days horizon Zijin Mining Group is expected to generate 3.3 times more return on investment than Shake Shack. However, Zijin Mining is 3.3 times more volatile than Shake Shack. It trades about 0.06 of its potential returns per unit of risk. Shake Shack is currently generating about 0.09 per unit of risk. If you would invest 90.00 in Zijin Mining Group on September 3, 2024 and sell it today you would earn a total of 101.00 from holding Zijin Mining Group or generate 112.22% 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. Shake Shack
Performance |
| Timeline |
| Zijin Mining Group |
| Shake Shack |
Zijin Mining and Shake Shack Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Shake Shack
The main advantage of trading using opposite Zijin Mining and Shake Shack positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Shake Shack 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 Shake Shack will offset losses from the drop in Shake Shack's long position.| Zijin Mining vs. Harmony Gold Mining | Zijin Mining vs. SPACE | Zijin Mining vs. T Rowe Price | Zijin Mining vs. Ampleforth |
| Shake Shack vs. Highway Holdings Limited | Shake Shack vs. QCR Holdings | Shake Shack vs. Partner Communications | Shake Shack vs. Acumen Pharmaceuticals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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