Correlation Between Zijin Mining and Markor International

Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Markor International 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 Markor International 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 Markor International Home, you can compare the effects of market volatilities on Zijin Mining and Markor International 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 Markor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Markor International.

Diversification Opportunities for Zijin Mining and Markor International

-0.52

Correlation Coefficient

Zijin Mining  Markor International

Excellent diversification

The 3 months correlation between Zijin and Markor is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Markor International Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markor International Home 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 Markor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markor International Home has no effect on the direction of Zijin Mining i.e., Zijin Mining and Markor International go up and down completely randomly.

Pair Corralation between Zijin Mining and Markor International

Assuming the 90 days trading horizon Zijin Mining Group is expected to under-perform the Markor International. But the stock apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 3.67 times less risky than Markor International. The stock trades about -0.03 of its potential returns per unit of risk. The Markor International Home is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  204.00  in Markor International Home on September 29, 2024 and sell it today you would lose (9.00) from holding Markor International Home or give up 4.41% of portfolio value over 90 days.

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

Zijin Mining Group  vs.  Markor International Home

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Markor International Home

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Markor International Home are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Markor International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Zijin Mining and Markor International

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

The idea behind Zijin Mining Group and Markor International Home 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.