Correlation Between Zijin Mining and GRUPO CARSO-A1

Can any of the company-specific risk be diversified away by investing in both Zijin Mining and GRUPO CARSO-A1 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 GRUPO CARSO-A1 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 GRUPO CARSO A1, you can compare the effects of market volatilities on Zijin Mining and GRUPO CARSO-A1 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 GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and GRUPO CARSO-A1.

Diversification Opportunities for Zijin Mining and GRUPO CARSO-A1

0.2

Correlation Coefficient

Zijin Mining  GRUPO CARSO-A1

Modest diversification

The 3 months correlation between Zijin and GRUPO is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 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 GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of Zijin Mining i.e., Zijin Mining and GRUPO CARSO-A1 go up and down completely randomly.

Pair Corralation between Zijin Mining and GRUPO CARSO-A1

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the GRUPO CARSO-A1. But the stock apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 1.13 times less risky than GRUPO CARSO-A1. The stock trades about -0.03 of its potential returns per unit of risk. The GRUPO CARSO A1 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  560.00  in GRUPO CARSO A1 on October 10, 2024 and sell it today you would lose (50.00) from holding GRUPO CARSO A1 or give up 8.93% of portfolio value over 90 days.

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

Zijin Mining Group  vs.  GRUPO CARSO A1

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

GRUPO CARSO A1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRUPO CARSO A1 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GRUPO CARSO-A1 is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Zijin Mining and GRUPO CARSO-A1

The main advantage of trading using opposite Zijin Mining and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.

The idea behind Zijin Mining Group and GRUPO CARSO A1 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.