Correlation Between FUYO GENERAL and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and Zijin Mining Group, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Zijin Mining.
Diversification Opportunities for FUYO GENERAL and Zijin Mining
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FUYO and Zijin is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE 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 FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and Zijin Mining go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Zijin Mining
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to under-perform the Zijin Mining. But the stock apears to be less risky and, when comparing its historical volatility, FUYO GENERAL LEASE is 2.04 times less risky than Zijin Mining. The stock trades about -0.05 of its potential returns per unit of risk. The Zijin Mining Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Zijin Mining Group on February 11, 2024 and sell it today you would earn a total of 79.00 from holding Zijin Mining Group or generate 60.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FUYO GENERAL LEASE vs. Zijin Mining Group
Performance |
Timeline |
FUYO GENERAL LEASE |
Zijin Mining Group |
FUYO GENERAL and Zijin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FUYO GENERAL and Zijin Mining
The main advantage of trading using opposite FUYO GENERAL and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.FUYO GENERAL vs. AMERCO | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Avis Budget Group | FUYO GENERAL vs. ALD SA |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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