Correlation Between Minmetals Capital and Beijing Jiaman

Can any of the company-specific risk be diversified away by investing in both Minmetals Capital and Beijing Jiaman 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 Minmetals Capital and Beijing Jiaman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Minmetals Capital Co and Beijing Jiaman Dress, you can compare the effects of market volatilities on Minmetals Capital and Beijing Jiaman 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 Minmetals Capital with a short position of Beijing Jiaman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minmetals Capital and Beijing Jiaman.

Diversification Opportunities for Minmetals Capital and Beijing Jiaman

0.7

Correlation Coefficient

Minmetals Capital  Beijing Jiaman

Poor diversification

The 3 months correlation between Minmetals and Beijing is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Minmetals Capital Co and Beijing Jiaman Dress in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Jiaman Dress and Minmetals Capital 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 Minmetals Capital Co are associated (or correlated) with Beijing Jiaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Jiaman Dress has no effect on the direction of Minmetals Capital i.e., Minmetals Capital and Beijing Jiaman go up and down completely randomly.

Pair Corralation between Minmetals Capital and Beijing Jiaman

Assuming the 90 days trading horizon Minmetals Capital Co is expected to under-perform the Beijing Jiaman. In addition to that, Minmetals Capital is 1.0 times more volatile than Beijing Jiaman Dress. It trades about -0.17 of its total potential returns per unit of risk. Beijing Jiaman Dress is currently generating about -0.07 per unit of volatility. If you would invest  2,226  in Beijing Jiaman Dress on December 1, 2024 and sell it today you would lose (189.00) from holding Beijing Jiaman Dress or give up 8.49% of portfolio value over 90 days.

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

Minmetals Capital Co  vs.  Beijing Jiaman Dress

Minmetals Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minmetals Capital Co 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Beijing Jiaman Dress

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beijing Jiaman Dress 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 Minmetals Capital and Beijing Jiaman

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

The idea behind Minmetals Capital Co and Beijing Jiaman Dress 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.

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.