Correlation Between Salient Mlp and Zijin Mining

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

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

Diversification Opportunities for Salient Mlp and Zijin Mining

0.87

Correlation Coefficient

Salient Mlp  Zijin Mining

Very poor diversification

The 3 months correlation between Salient and Zijin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Salient Mlp Energy 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 Salient Mlp 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 Salient Mlp Energy 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 Salient Mlp i.e., Salient Mlp and Zijin Mining go up and down completely randomly.

Pair Corralation between Salient Mlp and Zijin Mining

Assuming the 90 days horizon Salient Mlp is expected to generate 3.66 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, Salient Mlp Energy is 4.58 times less risky than Zijin Mining. It trades about 0.17 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  151.00  in Zijin Mining Group on March 7, 2024 and sell it today you would earn a total of  40.00  from holding Zijin Mining Group or generate 26.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Salient Mlp Energy  vs.  Zijin Mining Group

Salient Mlp Energy

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Salient Mlp Energy are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Salient Mlp may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Zijin Mining Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zijin Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salient Mlp and Zijin Mining

The main advantage of trading using opposite Salient Mlp and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salient Mlp 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 Salient Mlp Energy 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.