Correlation Between WEC Energy and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both WEC Energy 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 WEC Energy and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WEC Energy Group and Zijin Mining Group, you can compare the effects of market volatilities on WEC Energy 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 WEC Energy with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEC Energy and Zijin Mining.
Diversification Opportunities for WEC Energy and Zijin Mining
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WEC and Zijin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding WEC Energy Group 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 WEC Energy 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 WEC Energy Group 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 WEC Energy i.e., WEC Energy and Zijin Mining go up and down completely randomly.
Pair Corralation between WEC Energy and Zijin Mining
Considering the 90-day investment horizon WEC Energy Group is expected to generate 0.23 times more return on investment than Zijin Mining. However, WEC Energy Group is 4.32 times less risky than Zijin Mining. It trades about 0.18 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.0 per unit of risk. If you would invest 7,676 in WEC Energy Group on September 24, 2024 and sell it today you would earn a total of 1,774 from holding WEC Energy Group or generate 23.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 97.64% |
Values | Daily Returns |
WEC Energy Group vs. Zijin Mining Group
Performance |
Timeline |
WEC Energy Group |
Zijin Mining Group |
WEC Energy and Zijin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WEC Energy and Zijin Mining
The main advantage of trading using opposite WEC Energy and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEC Energy 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.WEC Energy vs. Alliant Energy Corp | WEC Energy vs. CMS Energy | WEC Energy vs. Exelon | WEC Energy vs. Evergy, |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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