Correlation Between SuZhou ChunXing and Zijin Mining

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

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

Diversification Opportunities for SuZhou ChunXing and Zijin Mining

0.0

Correlation Coefficient

SuZhou ChunXing  Zijin Mining

Pay attention - limited upside

The 3 months correlation between SuZhou and Zijin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SuZhou ChunXing Precision 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 SuZhou ChunXing 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 SuZhou ChunXing Precision 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 SuZhou ChunXing i.e., SuZhou ChunXing and Zijin Mining go up and down completely randomly.

Pair Corralation between SuZhou ChunXing and Zijin Mining

If you would invest  0.00  in SuZhou ChunXing Precision on October 5, 2024 and sell it today you would earn a total of  0.00  from holding SuZhou ChunXing Precision or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

SuZhou ChunXing Precision  vs.  Zijin Mining Group

SuZhou ChunXing Precision

Risk-Adjusted Performance

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Insignificant

Over the last 90 days SuZhou ChunXing Precision has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SuZhou ChunXing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zijin Mining Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zijin Mining Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with SuZhou ChunXing and Zijin Mining

The main advantage of trading using opposite SuZhou ChunXing and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SuZhou ChunXing 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 SuZhou ChunXing Precision 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.