Correlation Between Zijin Mining and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and MACOM Technology 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 MACOM Technology 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 MACOM Technology Solutions, you can compare the effects of market volatilities on Zijin Mining and MACOM Technology 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 MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and MACOM Technology.
Diversification Opportunities for Zijin Mining and MACOM Technology
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and MACOM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol 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 MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of Zijin Mining i.e., Zijin Mining and MACOM Technology go up and down completely randomly.
Pair Corralation between Zijin Mining and MACOM Technology
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.02 times more return on investment than MACOM Technology. However, Zijin Mining is 1.02 times more volatile than MACOM Technology Solutions. It trades about 0.0 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about -0.15 per unit of risk. If you would invest 178.00 in Zijin Mining Group on December 4, 2024 and sell it today you would lose (3.00) from holding Zijin Mining Group or give up 1.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Zijin Mining Group vs. MACOM Technology Solutions
Performance |
Timeline |
Zijin Mining Group |
MACOM Technology Sol |
Zijin Mining and MACOM Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zijin Mining and MACOM Technology
The main advantage of trading using opposite Zijin Mining and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.Zijin Mining vs. Hua Hong Semiconductor | Zijin Mining vs. ON Semiconductor | Zijin Mining vs. Information Services International Dentsu | Zijin Mining vs. Lattice Semiconductor |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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