Correlation Between CN MODERN and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Zijin 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 CN MODERN and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and Zijin Mining Group, you can compare the effects of market volatilities on CN MODERN and Zijin 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 CN MODERN with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Zijin Mining.
Diversification Opportunities for CN MODERN and Zijin Mining
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 07M and Zijin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of CN MODERN i.e., CN MODERN and Zijin Mining go up and down completely randomly.
Pair Corralation between CN MODERN and Zijin Mining
Assuming the 90 days trading horizon CN MODERN is expected to generate 1.84 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, CN MODERN DAIRY is 1.18 times less risky than Zijin Mining. It trades about 0.04 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Zijin Mining Group on November 30, 2024 and sell it today you would earn a total of 85.00 from holding Zijin Mining Group or generate 87.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CN MODERN DAIRY vs. Zijin Mining Group
Performance |
Timeline |
CN MODERN DAIRY |
Zijin Mining Group |
CN MODERN and Zijin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CN MODERN and Zijin Mining
The main advantage of trading using opposite CN MODERN and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Zijin 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.CN MODERN vs. De Grey Mining | CN MODERN vs. INTER CARS SA | CN MODERN vs. Zijin Mining Group | CN MODERN vs. GOLDQUEST MINING |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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