Correlation Between Zijin Mining and Altair Engineering

Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Altair Engineering 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 Altair Engineering 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 Altair Engineering, you can compare the effects of market volatilities on Zijin Mining and Altair Engineering 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 Altair Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Altair Engineering.

Diversification Opportunities for Zijin Mining and Altair Engineering

-0.26

Correlation Coefficient

Zijin Mining  Altair Engineering

Very good diversification

The 3 months correlation between Zijin and Altair is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Altair Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Engineering 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 Altair Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair Engineering has no effect on the direction of Zijin Mining i.e., Zijin Mining and Altair Engineering go up and down completely randomly.

Pair Corralation between Zijin Mining and Altair Engineering

Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.66 times more return on investment than Altair Engineering. However, Zijin Mining is 1.66 times more volatile than Altair Engineering. It trades about 0.06 of its potential returns per unit of risk. Altair Engineering is currently generating about 0.07 per unit of risk. If you would invest  119.00  in Zijin Mining Group on September 17, 2024 and sell it today you would earn a total of  55.00  from holding Zijin Mining Group or generate 46.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Zijin Mining Group  vs.  Altair Engineering

Zijin Mining Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Zijin Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Altair Engineering

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altair Engineering are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Altair Engineering reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zijin Mining and Altair Engineering

The main advantage of trading using opposite Zijin Mining and Altair Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Altair Engineering 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 Altair Engineering will offset losses from the drop in Altair Engineering's long position.

The idea behind Zijin Mining Group and Altair Engineering pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.