Correlation Between Highway Holdings and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both Highway Holdings 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 Highway Holdings and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and Zijin Mining Group, you can compare the effects of market volatilities on Highway Holdings 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 Highway Holdings with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Zijin Mining.
Diversification Opportunities for Highway Holdings and Zijin Mining
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highway and Zijin is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited 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 Highway Holdings 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 Highway Holdings Limited 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 Highway Holdings i.e., Highway Holdings and Zijin Mining go up and down completely randomly.
Pair Corralation between Highway Holdings and Zijin Mining
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.33 times more return on investment than Zijin Mining. However, Highway Holdings Limited is 3.01 times less risky than Zijin Mining. It trades about -0.06 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.06 per unit of risk. If you would invest 193.00 in Highway Holdings Limited on September 24, 2024 and sell it today you would lose (3.00) from holding Highway Holdings Limited or give up 1.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Highway Holdings Limited vs. Zijin Mining Group
Performance |
Timeline |
Highway Holdings |
Zijin Mining Group |
Highway Holdings and Zijin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highway Holdings and Zijin Mining
The main advantage of trading using opposite Highway Holdings and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings 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.Highway Holdings vs. Insteel Industries | Highway Holdings vs. Carpenter Technology | Highway Holdings vs. Mueller Industries | Highway Holdings vs. Northwest Pipe |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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