Correlation Between Semperit Aktiengesellscha and Zijin Mining

Can any of the company-specific risk be diversified away by investing in both Semperit Aktiengesellscha and Zijin Mining 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 Semperit Aktiengesellscha and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Semperit Aktiengesellschaft Holding and Zijin Mining Group, you can compare the effects of market volatilities on Semperit Aktiengesellscha and Zijin Mining 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 Semperit Aktiengesellscha with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semperit Aktiengesellscha and Zijin Mining.

Diversification Opportunities for Semperit Aktiengesellscha and Zijin Mining

-0.16

Correlation Coefficient

Semperit Aktiengesellscha  Zijin Mining

Good diversification

The 3 months correlation between Semperit and Zijin is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Semperit Aktiengesellschaft Ho and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group and Semperit Aktiengesellscha 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 Semperit Aktiengesellschaft Holding are associated (or correlated) with Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Semperit Aktiengesellscha i.e., Semperit Aktiengesellscha and Zijin Mining go up and down completely randomly.

Pair Corralation between Semperit Aktiengesellscha and Zijin Mining

Assuming the 90 days trading horizon Semperit Aktiengesellschaft Holding is expected to generate 0.5 times more return on investment than Zijin Mining. However, Semperit Aktiengesellschaft Holding is 2.01 times less risky than Zijin Mining. It trades about 0.63 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.09 per unit of risk. If you would invest  1,188  in Semperit Aktiengesellschaft Holding on October 25, 2024 and sell it today you would earn a total of  220.00  from holding Semperit Aktiengesellschaft Holding or generate 18.52% return on investment over 90 days.

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

Semperit Aktiengesellschaft Ho  vs.  Zijin Mining Group

Semperit Aktiengesellscha

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Semperit Aktiengesellscha unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 latest uncertain 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.

Pair Trading with Semperit Aktiengesellscha and Zijin Mining

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

The idea behind Semperit Aktiengesellschaft Holding and Zijin Mining Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.