Correlation Between Sinomine Resource and Zhejiang Publishing

Can any of the company-specific risk be diversified away by investing in both Sinomine Resource and Zhejiang Publishing 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 Sinomine Resource and Zhejiang Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sinomine Resource Exploration and Zhejiang Publishing Media, you can compare the effects of market volatilities on Sinomine Resource and Zhejiang Publishing 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 Sinomine Resource with a short position of Zhejiang Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomine Resource and Zhejiang Publishing.

Diversification Opportunities for Sinomine Resource and Zhejiang Publishing

0.06

Correlation Coefficient

Sinomine Resource  Zhejiang Publishing

Significant diversification

The 3 months correlation between Sinomine and Zhejiang is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sinomine Resource Exploration and Zhejiang Publishing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Publishing Media and Sinomine Resource 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 Sinomine Resource Exploration are associated (or correlated) with Zhejiang Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Publishing Media has no effect on the direction of Sinomine Resource i.e., Sinomine Resource and Zhejiang Publishing go up and down completely randomly.

Pair Corralation between Sinomine Resource and Zhejiang Publishing

Assuming the 90 days trading horizon Sinomine Resource Exploration is expected to under-perform the Zhejiang Publishing. In addition to that, Sinomine Resource is 1.11 times more volatile than Zhejiang Publishing Media. It trades about -0.02 of its total potential returns per unit of risk. Zhejiang Publishing Media is currently generating about 0.03 per unit of volatility. If you would invest  677.00  in Zhejiang Publishing Media on October 4, 2024 and sell it today you would earn a total of  111.00  from holding Zhejiang Publishing Media or generate 16.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sinomine Resource Exploration  vs.  Zhejiang Publishing Media

Sinomine Resource

Risk-Adjusted Performance

0 of 100

Very Weak

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

Zhejiang Publishing Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhejiang Publishing Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Sinomine Resource and Zhejiang Publishing

The main advantage of trading using opposite Sinomine Resource and Zhejiang Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomine Resource position performs unexpectedly, Zhejiang Publishing 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 Zhejiang Publishing will offset losses from the drop in Zhejiang Publishing's long position.

The idea behind Sinomine Resource Exploration and Zhejiang Publishing Media 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.