Correlation Between Zijin Mining and Lockheed Martin
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Lockheed Martin 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 Zijin Mining and Lockheed Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zijin Mining Group and Lockheed Martin, you can compare the effects of market volatilities on Zijin Mining and Lockheed Martin 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 Zijin Mining with a short position of Lockheed Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Lockheed Martin.
Diversification Opportunities for Zijin Mining and Lockheed Martin
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zijin and Lockheed is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Lockheed Martin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lockheed Martin and Zijin Mining 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 Zijin Mining Group are associated (or correlated) with Lockheed Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lockheed Martin has no effect on the direction of Zijin Mining i.e., Zijin Mining and Lockheed Martin go up and down completely randomly.
Pair Corralation between Zijin Mining and Lockheed Martin
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.34 times more return on investment than Lockheed Martin. However, Zijin Mining is 1.34 times more volatile than Lockheed Martin. It trades about 0.15 of its potential returns per unit of risk. Lockheed Martin is currently generating about -0.08 per unit of risk. If you would invest 185.00 in Zijin Mining Group on April 25, 2025 and sell it today you would earn a total of 53.00 from holding Zijin Mining Group or generate 28.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Zijin Mining Group vs. Lockheed Martin
Performance |
Timeline |
Zijin Mining Group |
Lockheed Martin |
Zijin Mining and Lockheed Martin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zijin Mining and Lockheed Martin
The main advantage of trading using opposite Zijin Mining and Lockheed Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Lockheed Martin 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 Lockheed Martin will offset losses from the drop in Lockheed Martin's long position.Zijin Mining vs. BHP Group Limited | Zijin Mining vs. Rio Tinto Group | Zijin Mining vs. Vale SA | Zijin Mining vs. Vale 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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