Correlation Between Zijin Mining and SolarEdge Technologies
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and SolarEdge Technologies 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 SolarEdge Technologies 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 SolarEdge Technologies, you can compare the effects of market volatilities on Zijin Mining and SolarEdge Technologies 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 SolarEdge Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and SolarEdge Technologies.
Diversification Opportunities for Zijin Mining and SolarEdge Technologies
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zijin and SolarEdge is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and SolarEdge Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarEdge Technologies 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 SolarEdge Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarEdge Technologies has no effect on the direction of Zijin Mining i.e., Zijin Mining and SolarEdge Technologies go up and down completely randomly.
Pair Corralation between Zijin Mining and SolarEdge Technologies
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.54 times more return on investment than SolarEdge Technologies. However, Zijin Mining Group is 1.85 times less risky than SolarEdge Technologies. It trades about 0.06 of its potential returns per unit of risk. SolarEdge Technologies is currently generating about -0.03 per unit of risk. If you would invest 166.00 in Zijin Mining Group on September 13, 2024 and sell it today you would earn a total of 18.00 from holding Zijin Mining Group or generate 10.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Zijin Mining Group vs. SolarEdge Technologies
Performance |
Timeline |
Zijin Mining Group |
SolarEdge Technologies |
Zijin Mining and SolarEdge Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zijin Mining and SolarEdge Technologies
The main advantage of trading using opposite Zijin Mining and SolarEdge Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, SolarEdge Technologies 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 SolarEdge Technologies will offset losses from the drop in SolarEdge Technologies' long position.Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Vale SA | Zijin Mining vs. Superior Plus Corp | Zijin Mining vs. SIVERS SEMICONDUCTORS AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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