Correlation Between Zijin Mining and ECHO INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and ECHO INVESTMENT 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 ECHO INVESTMENT 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 ECHO INVESTMENT ZY, you can compare the effects of market volatilities on Zijin Mining and ECHO INVESTMENT 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 ECHO INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and ECHO INVESTMENT.
Diversification Opportunities for Zijin Mining and ECHO INVESTMENT
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zijin and ECHO is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and ECHO INVESTMENT ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECHO INVESTMENT ZY 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 ECHO INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECHO INVESTMENT ZY has no effect on the direction of Zijin Mining i.e., Zijin Mining and ECHO INVESTMENT go up and down completely randomly.
Pair Corralation between Zijin Mining and ECHO INVESTMENT
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.51 times more return on investment than ECHO INVESTMENT. However, Zijin Mining is 1.51 times more volatile than ECHO INVESTMENT ZY. It trades about -0.05 of its potential returns per unit of risk. ECHO INVESTMENT ZY is currently generating about -0.11 per unit of risk. If you would invest 181.00 in Zijin Mining Group on December 4, 2024 and sell it today you would lose (6.00) from holding Zijin Mining Group or give up 3.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Zijin Mining Group vs. ECHO INVESTMENT ZY
Performance |
Timeline |
Zijin Mining Group |
ECHO INVESTMENT ZY |
Zijin Mining and ECHO INVESTMENT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zijin Mining and ECHO INVESTMENT
The main advantage of trading using opposite Zijin Mining and ECHO INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, ECHO INVESTMENT 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 ECHO INVESTMENT will offset losses from the drop in ECHO INVESTMENT'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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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