Correlation Between Zijin Mining and Mako Mining
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Mako Mining 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 Mako Mining 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 Mako Mining Corp, you can compare the effects of market volatilities on Zijin Mining and Mako Mining 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 Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Mako Mining.
Diversification Opportunities for Zijin Mining and Mako Mining
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Mako is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Mako Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mako Mining Corp 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 Mako Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mako Mining Corp has no effect on the direction of Zijin Mining i.e., Zijin Mining and Mako Mining go up and down completely randomly.
Pair Corralation between Zijin Mining and Mako Mining
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Mako Mining. In addition to that, Zijin Mining is 1.43 times more volatile than Mako Mining Corp. It trades about -0.2 of its total potential returns per unit of risk. Mako Mining Corp is currently generating about -0.08 per unit of volatility. If you would invest 226.00 in Mako Mining Corp on September 1, 2024 and sell it today you would lose (8.00) from holding Mako Mining Corp or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Mako Mining Corp
Performance |
| Timeline |
| Zijin Mining Group |
| Mako Mining Corp |
Zijin Mining and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Mako Mining
The main advantage of trading using opposite Zijin Mining and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Mako Mining 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 Mako Mining will offset losses from the drop in Mako Mining's long position.| Zijin Mining vs. AngloGold Ashanti plc | Zijin Mining vs. Harmony Gold Mining | Zijin Mining vs. Eldorado Gold Corp | Zijin Mining vs. Kinross Gold |
| Mako Mining vs. Labrador Gold Corp | Mako Mining vs. Exploits Discovery Corp | Mako Mining vs. Puma Exploration | Mako Mining vs. White Gold Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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