Correlation Between Zijin Mining and Loews Corp
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Loews Corp 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 Loews Corp 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 Loews Corp, you can compare the effects of market volatilities on Zijin Mining and Loews Corp 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 Loews Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Loews Corp.
Diversification Opportunities for Zijin Mining and Loews Corp
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zijin and Loews is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Loews Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loews Corp 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 Loews Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loews Corp has no effect on the direction of Zijin Mining i.e., Zijin Mining and Loews Corp go up and down completely randomly.
Pair Corralation between Zijin Mining and Loews Corp
Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Loews Corp. In addition to that, Zijin Mining is 3.09 times more volatile than Loews Corp. It trades about -0.05 of its total potential returns per unit of risk. Loews Corp is currently generating about 0.07 per unit of volatility. If you would invest 7,950 in Loews Corp on October 12, 2024 and sell it today you would earn a total of 100.00 from holding Loews Corp or generate 1.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Zijin Mining Group vs. Loews Corp
Performance |
Timeline |
Zijin Mining Group |
Loews Corp |
Zijin Mining and Loews Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zijin Mining and Loews Corp
The main advantage of trading using opposite Zijin Mining and Loews Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Loews Corp 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 Loews Corp will offset losses from the drop in Loews Corp's long position.Zijin Mining vs. Playa Hotels Resorts | Zijin Mining vs. Gaming and Leisure | Zijin Mining vs. Wyndham Hotels Resorts | Zijin Mining vs. Pebblebrook Hotel Trust |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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