Correlation Between Ningbo Jintian and China Minmetals

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

By analyzing existing cross correlation between Ningbo Jintian Copper and China Minmetals Rare, you can compare the effects of market volatilities on Ningbo Jintian and China Minmetals 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 Ningbo Jintian with a short position of China Minmetals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Jintian and China Minmetals.

Diversification Opportunities for Ningbo Jintian and China Minmetals

0.37

Correlation Coefficient

Ningbo Jintian  China Minmetals

Weak diversification

The 3 months correlation between Ningbo and China is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Jintian Copper and China Minmetals Rare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minmetals Rare and Ningbo Jintian 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 Ningbo Jintian Copper are associated (or correlated) with China Minmetals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minmetals Rare has no effect on the direction of Ningbo Jintian i.e., Ningbo Jintian and China Minmetals go up and down completely randomly.

Pair Corralation between Ningbo Jintian and China Minmetals

Assuming the 90 days trading horizon Ningbo Jintian is expected to generate 1.23 times less return on investment than China Minmetals. But when comparing it to its historical volatility, Ningbo Jintian Copper is 1.15 times less risky than China Minmetals. It trades about 0.02 of its potential returns per unit of risk. China Minmetals Rare is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,743  in China Minmetals Rare on October 10, 2024 and sell it today you would earn a total of  38.00  from holding China Minmetals Rare or generate 1.39% return on investment over 90 days.

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

Ningbo Jintian Copper  vs.  China Minmetals Rare

Ningbo Jintian Copper

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ningbo Jintian Copper are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ningbo Jintian is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

China Minmetals Rare

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Minmetals Rare are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, China Minmetals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ningbo Jintian and China Minmetals

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

The idea behind Ningbo Jintian Copper and China Minmetals Rare 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.