Correlation Between Zijin Mining and Steppe Gold
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Steppe 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 Steppe 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 Steppe Gold, you can compare the effects of market volatilities on Zijin Mining and Steppe 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 Steppe Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Steppe Gold.
Diversification Opportunities for Zijin Mining and Steppe Gold
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zijin and Steppe is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Steppe Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steppe 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 Steppe Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steppe Gold has no effect on the direction of Zijin Mining i.e., Zijin Mining and Steppe Gold go up and down completely randomly.
Pair Corralation between Zijin Mining and Steppe Gold
Assuming the 90 days horizon Zijin Mining Group is expected to generate 2.8 times more return on investment than Steppe Gold. However, Zijin Mining is 2.8 times more volatile than Steppe Gold. It trades about 0.06 of its potential returns per unit of risk. Steppe Gold is currently generating about -0.02 per unit of risk. If you would invest 90.00 in Zijin Mining Group on September 2, 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 Together |
| Strength | Strong |
| Accuracy | 90.73% |
| Values | Daily Returns |
Zijin Mining Group vs. Steppe Gold
Performance |
| Timeline |
| Zijin Mining Group |
| Steppe Gold |
Zijin Mining and Steppe Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Steppe Gold
The main advantage of trading using opposite Zijin Mining and Steppe Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Steppe 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 Steppe Gold will offset losses from the drop in Steppe Gold'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 |
| Steppe Gold vs. Maple Gold Mines | Steppe Gold vs. Caledonia Mining | Steppe Gold vs. Fortuna Silver Mines | Steppe Gold vs. Sandstorm Gold Ltd |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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