Correlation Between BHP Group and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both BHP Group 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 BHP Group and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BHP Group Limited and Zijin Mining Group, you can compare the effects of market volatilities on BHP Group 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 BHP Group with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP Group and Zijin Mining.
Diversification Opportunities for BHP Group and Zijin Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BHP and Zijin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group 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 BHP Group 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 BHP Group 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 BHP Group i.e., BHP Group and Zijin Mining go up and down completely randomly.
Pair Corralation between BHP Group and Zijin Mining
If you would invest 160.00 in Zijin Mining Group on March 18, 2024 and sell it today you would earn a total of 32.00 from holding Zijin Mining Group or generate 20.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 1.96% |
Values | Daily Returns |
BHP Group Limited vs. Zijin Mining Group
Performance |
Timeline |
BHP Group Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zijin Mining Group |
BHP Group and Zijin Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BHP Group and Zijin Mining
The main advantage of trading using opposite BHP Group and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP Group 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.BHP Group vs. Iridium Communications | BHP Group vs. Cellnex Telecom SA | BHP Group vs. Spirent Communications plc | BHP Group vs. Materialise NV |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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