Correlation Between Dolphin Entertainment and Zijin Mining

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

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

Diversification Opportunities for Dolphin Entertainment and Zijin Mining

0.69

Correlation Coefficient

Dolphin Entertainment  Zijin Mining

Poor diversification

The 3 months correlation between Dolphin and Zijin is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment 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 Dolphin Entertainment 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 Dolphin Entertainment 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 Dolphin Entertainment i.e., Dolphin Entertainment and Zijin Mining go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and Zijin Mining

Given the investment horizon of 90 days Dolphin Entertainment is expected to generate 1.48 times more return on investment than Zijin Mining. However, Dolphin Entertainment is 1.48 times more volatile than Zijin Mining Group. It trades about 0.02 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.08 per unit of risk. If you would invest  117.00  in Dolphin Entertainment on October 1, 2024 and sell it today you would lose (3.00) from holding Dolphin Entertainment or give up 2.56% of portfolio value over 90 days.

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

Dolphin Entertainment  vs.  Zijin Mining Group

Dolphin Entertainment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dolphin Entertainment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Dolphin Entertainment is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Dolphin Entertainment and Zijin Mining

The main advantage of trading using opposite Dolphin Entertainment and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment 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 Dolphin Entertainment 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.