Correlation Between Zijin Mining and FATFISH GROUP

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

Diversification Opportunities for Zijin Mining and FATFISH GROUP

0.09

Correlation Coefficient

Zijin Mining  FATFISH GROUP

Significant diversification

The 3 months correlation between Zijin and FATFISH is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and FATFISH GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FATFISH GROUP LTD 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 FATFISH GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FATFISH GROUP LTD has no effect on the direction of Zijin Mining i.e., Zijin Mining and FATFISH GROUP go up and down completely randomly.

Pair Corralation between Zijin Mining and FATFISH GROUP

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the FATFISH GROUP. But the stock apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 3.69 times less risky than FATFISH GROUP. The stock trades about -0.09 of its potential returns per unit of risk. The FATFISH GROUP LTD is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  0.40  in FATFISH GROUP LTD on September 3, 2024 and sell it today you would earn a total of  0.15  from holding FATFISH GROUP LTD or generate 37.5% return on investment over 90 days.

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

Zijin Mining Group  vs.  FATFISH GROUP LTD

Zijin Mining Group

Risk-Adjusted Performance

2 of 100

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 uncertain basic indicators, Zijin Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

FATFISH GROUP LTD

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FATFISH GROUP LTD are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FATFISH GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zijin Mining and FATFISH GROUP

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

The idea behind Zijin Mining Group and FATFISH GROUP LTD 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..