Correlation Between Zijin Mining and MITSUBISHI STEEL
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and MITSUBISHI STEEL 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 MITSUBISHI STEEL 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 MITSUBISHI STEEL MFG, you can compare the effects of market volatilities on Zijin Mining and MITSUBISHI STEEL 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 MITSUBISHI STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and MITSUBISHI STEEL.
Diversification Opportunities for Zijin Mining and MITSUBISHI STEEL
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and MITSUBISHI is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and MITSUBISHI STEEL MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MITSUBISHI STEEL MFG 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 MITSUBISHI STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MITSUBISHI STEEL MFG has no effect on the direction of Zijin Mining i.e., Zijin Mining and MITSUBISHI STEEL go up and down completely randomly.
Pair Corralation between Zijin Mining and MITSUBISHI STEEL
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the MITSUBISHI STEEL. In addition to that, Zijin Mining is 1.8 times more volatile than MITSUBISHI STEEL MFG. It trades about -0.04 of its total potential returns per unit of risk. MITSUBISHI STEEL MFG is currently generating about 0.19 per unit of volatility. If you would invest 985.00 in MITSUBISHI STEEL MFG on December 2, 2024 and sell it today you would earn a total of 55.00 from holding MITSUBISHI STEEL MFG or generate 5.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Zijin Mining Group vs. MITSUBISHI STEEL MFG
Performance |
Timeline |
Zijin Mining Group |
MITSUBISHI STEEL MFG |
Zijin Mining and MITSUBISHI STEEL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zijin Mining and MITSUBISHI STEEL
The main advantage of trading using opposite Zijin Mining and MITSUBISHI STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, MITSUBISHI STEEL 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 MITSUBISHI STEEL will offset losses from the drop in MITSUBISHI STEEL's long position.Zijin Mining vs. PLANT VEDA FOODS | Zijin Mining vs. GWILLI FOOD | Zijin Mining vs. US Foods Holding | Zijin Mining vs. SMA Solar Technology |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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