Correlation Between Zijin Mining and Yunnan Jianzhijia

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

Diversification Opportunities for Zijin Mining and Yunnan Jianzhijia

ZijinYunnanDiversified AwayZijinYunnanDiversified Away100%
-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Zijin and Yunnan is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Yunnan Jianzhijia Health Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Jianzhijia 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 Yunnan Jianzhijia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Jianzhijia has no effect on the direction of Zijin Mining i.e., Zijin Mining and Yunnan Jianzhijia go up and down completely randomly.

Pair Corralation between Zijin Mining and Yunnan Jianzhijia

Assuming the 90 days trading horizon Zijin Mining Group is expected to generate 0.62 times more return on investment than Yunnan Jianzhijia. However, Zijin Mining Group is 1.62 times less risky than Yunnan Jianzhijia. It trades about 0.07 of its potential returns per unit of risk. Yunnan Jianzhijia Health Chain is currently generating about -0.09 per unit of risk. If you would invest  1,621  in Zijin Mining Group on November 19, 2024 and sell it today you would earn a total of  95.00  from holding Zijin Mining Group or generate 5.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Zijin Mining Group  vs.  Yunnan Jianzhijia Health Chain

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-505
JavaScript chart by amCharts 3.21.15601899 605266
       Timeline  
Zijin Mining Group 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zijin Mining may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1515.51616.51717.5
Yunnan Jianzhijia 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Yunnan Jianzhijia Health Chain 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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2022242628

Zijin Mining and Yunnan Jianzhijia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.41-4.08-2.75-1.42-0.09021.242.573.95.236.56 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15601899 605266
       Returns  

Pair Trading with Zijin Mining and Yunnan Jianzhijia

The main advantage of trading using opposite Zijin Mining and Yunnan Jianzhijia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Yunnan Jianzhijia 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 Yunnan Jianzhijia will offset losses from the drop in Yunnan Jianzhijia's long position.
The idea behind Zijin Mining Group and Yunnan Jianzhijia Health Chain 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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