Correlation Between Gaztransport Technigaz and Zijin Mining

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

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

Diversification Opportunities for Gaztransport Technigaz and Zijin Mining

-0.51

Correlation Coefficient

Gaztransport Technigaz  Zijin Mining

Excellent diversification

The 3 months correlation between Gaztransport and Zijin is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group and Gaztransport Technigaz 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 Gaztransport Technigaz SA are associated (or correlated) with Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Zijin Mining go up and down completely randomly.

Pair Corralation between Gaztransport Technigaz and Zijin Mining

Assuming the 90 days horizon Gaztransport Technigaz SA is expected to under-perform the Zijin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Gaztransport Technigaz SA is 1.61 times less risky than Zijin Mining. The stock trades about -0.1 of its potential returns per unit of risk. The Zijin Mining Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  184.00  in Zijin Mining Group on September 20, 2024 and sell it today you would lose (2.00) from holding Zijin Mining Group or give up 1.09% of portfolio value over 90 days.

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

Gaztransport Technigaz SA  vs.  Zijin Mining Group

Gaztransport Technigaz

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gaztransport Technigaz is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Zijin Mining Group

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zijin Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gaztransport Technigaz and Zijin Mining

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

The idea behind Gaztransport Technigaz SA and Zijin Mining Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.