Correlation Between Zijin Mining and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and BBB Foods 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 BBB Foods 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 BBB Foods, you can compare the effects of market volatilities on Zijin Mining and BBB Foods 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 BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and BBB Foods.
Diversification Opportunities for Zijin Mining and BBB Foods
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zijin and BBB is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Zijin Mining i.e., Zijin Mining and BBB Foods go up and down completely randomly.
Pair Corralation between Zijin Mining and BBB Foods
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the BBB Foods. But the pink sheet apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 1.0 times less risky than BBB Foods. The pink sheet trades about -0.21 of its potential returns per unit of risk. The BBB Foods is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 3,422 in BBB Foods on August 29, 2024 and sell it today you would lose (433.00) from holding BBB Foods or give up 12.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. BBB Foods
Performance |
| Timeline |
| Zijin Mining Group |
| BBB Foods |
Zijin Mining and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and BBB Foods
The main advantage of trading using opposite Zijin Mining and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' 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 |
| BBB Foods vs. Innovative Food Hldg | BBB Foods vs. Calavo Growers | BBB Foods vs. The Chefs Warehouse | BBB Foods vs. AMCON Distributing |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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