Correlation Between Zijin Mining and TERADYNE

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

Diversification Opportunities for Zijin Mining and TERADYNE

0.21

Correlation Coefficient

Zijin Mining  TERADYNE

Modest diversification

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

Pair Corralation between Zijin Mining and TERADYNE

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the TERADYNE. In addition to that, Zijin Mining is 1.65 times more volatile than TERADYNE. It trades about -0.06 of its total potential returns per unit of risk. TERADYNE is currently generating about 0.29 per unit of volatility. If you would invest  9,523  in TERADYNE on October 6, 2024 and sell it today you would earn a total of  2,611  from holding TERADYNE or generate 27.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

Zijin Mining Group  vs.  TERADYNE

Zijin Mining Group

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

TERADYNE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TERADYNE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, TERADYNE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Zijin Mining and TERADYNE

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

The idea behind Zijin Mining Group and TERADYNE 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.