Correlation Between Zijin Mining and ZYF Lopsking

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

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

Diversification Opportunities for Zijin Mining and ZYF Lopsking

0.02

Correlation Coefficient

Zijin Mining  ZYF Lopsking

Significant diversification

The 3 months correlation between Zijin and ZYF is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and ZYF Lopsking Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZYF Lopsking Aluminum and Zijin Mining 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 Zijin Mining Group are associated (or correlated) with ZYF Lopsking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZYF Lopsking Aluminum has no effect on the direction of Zijin Mining i.e., Zijin Mining and ZYF Lopsking go up and down completely randomly.

Pair Corralation between Zijin Mining and ZYF Lopsking

Assuming the 90 days trading horizon Zijin Mining Group is expected to generate 0.73 times more return on investment than ZYF Lopsking. However, Zijin Mining Group is 1.38 times less risky than ZYF Lopsking. It trades about -0.01 of its potential returns per unit of risk. ZYF Lopsking Aluminum is currently generating about -0.03 per unit of risk. If you would invest  1,556  in Zijin Mining Group on December 2, 2024 and sell it today you would lose (21.00) from holding Zijin Mining Group or give up 1.35% of portfolio value over 90 days.

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

Zijin Mining Group  vs.  ZYF Lopsking Aluminum

Zijin Mining Group

Risk-Adjusted Performance

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 somewhat strong basic indicators, Zijin Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ZYF Lopsking Aluminum

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Zijin Mining and ZYF Lopsking

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

The idea behind Zijin Mining Group and ZYF Lopsking Aluminum 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 CEOs Directory module to screen CEOs from public companies around the world.