Correlation Between Zijin Mining and Shenandoah Telecommunicatio

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

Diversification Opportunities for Zijin Mining and Shenandoah Telecommunicatio

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Zijin and Shenandoah is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenandoah Telecommunicatio has no effect on the direction of Zijin Mining i.e., Zijin Mining and Shenandoah Telecommunicatio go up and down completely randomly.

Pair Corralation between Zijin Mining and Shenandoah Telecommunicatio

Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.15 times more return on investment than Shenandoah Telecommunicatio. However, Zijin Mining is 1.15 times more volatile than Shenandoah Telecommunications. It trades about 0.06 of its potential returns per unit of risk. Shenandoah Telecommunications is currently generating about -0.01 per unit of risk. If you would invest  93.00  in Zijin Mining Group on October 5, 2024 and sell it today you would earn a total of  88.00  from holding Zijin Mining Group or generate 94.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Zijin Mining Group  vs.  Shenandoah Telecommunications

 Performance 
       Timeline  
Zijin Mining Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Zijin Mining Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Shenandoah Telecommunicatio 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Shenandoah Telecommunications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Shenandoah Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Zijin Mining and Shenandoah Telecommunicatio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Zijin Mining and Shenandoah Telecommunicatio

The main advantage of trading using opposite Zijin Mining and Shenandoah Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio will offset losses from the drop in Shenandoah Telecommunicatio's long position.
The idea behind Zijin Mining Group and Shenandoah Telecommunications 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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