Correlation Between GUARDANT HEALTH and Zijin Mining

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

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

Diversification Opportunities for GUARDANT HEALTH and Zijin Mining

-0.78

Correlation Coefficient

GUARDANT HEALTH  Zijin Mining

Pay attention - limited upside

The 3 months correlation between GUARDANT and Zijin is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL 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 GUARDANT HEALTH 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 GUARDANT HEALTH CL 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 GUARDANT HEALTH i.e., GUARDANT HEALTH and Zijin Mining go up and down completely randomly.

Pair Corralation between GUARDANT HEALTH and Zijin Mining

Assuming the 90 days horizon GUARDANT HEALTH CL is expected to generate 1.25 times more return on investment than Zijin Mining. However, GUARDANT HEALTH is 1.25 times more volatile than Zijin Mining Group. It trades about 0.21 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.06 per unit of risk. If you would invest  2,149  in GUARDANT HEALTH CL on October 6, 2024 and sell it today you would earn a total of  851.00  from holding GUARDANT HEALTH CL or generate 39.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

GUARDANT HEALTH CL  vs.  Zijin Mining Group

GUARDANT HEALTH CL

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GUARDANT HEALTH CL are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GUARDANT HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GUARDANT HEALTH and Zijin Mining

The main advantage of trading using opposite GUARDANT HEALTH and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUARDANT HEALTH 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 GUARDANT HEALTH CL 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.