Correlation Between Zijin Mining and MEDIAN TECHNOLOGIEEO-05

Can any of the company-specific risk be diversified away by investing in both Zijin Mining and MEDIAN TECHNOLOGIEEO-05 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 MEDIAN TECHNOLOGIEEO-05 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 MEDIAN TECHNOLOGIEEO 05, you can compare the effects of market volatilities on Zijin Mining and MEDIAN TECHNOLOGIEEO-05 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 MEDIAN TECHNOLOGIEEO-05. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and MEDIAN TECHNOLOGIEEO-05.

Diversification Opportunities for Zijin Mining and MEDIAN TECHNOLOGIEEO-05

0.36

Correlation Coefficient

Zijin Mining  MEDIAN TECHNOLOGIEEO-05

Weak diversification

The 3 months correlation between Zijin and MEDIAN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and MEDIAN TECHNOLOGIEEO 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIAN TECHNOLOGIEEO-05 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 MEDIAN TECHNOLOGIEEO-05. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIAN TECHNOLOGIEEO-05 has no effect on the direction of Zijin Mining i.e., Zijin Mining and MEDIAN TECHNOLOGIEEO-05 go up and down completely randomly.

Pair Corralation between Zijin Mining and MEDIAN TECHNOLOGIEEO-05

Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.6 times more return on investment than MEDIAN TECHNOLOGIEEO-05. However, Zijin Mining Group is 1.67 times less risky than MEDIAN TECHNOLOGIEEO-05. It trades about 0.06 of its potential returns per unit of risk. MEDIAN TECHNOLOGIEEO 05 is currently generating about 0.0 per unit of risk. If you would invest  92.00  in Zijin Mining Group on October 8, 2024 and sell it today you would earn a total of  84.00  from holding Zijin Mining Group or generate 91.3% return on investment over 90 days.

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

Zijin Mining Group  vs.  MEDIAN TECHNOLOGIEEO 05

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.

MEDIAN TECHNOLOGIEEO-05

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MEDIAN TECHNOLOGIEEO 05 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MEDIAN TECHNOLOGIEEO-05 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Zijin Mining and MEDIAN TECHNOLOGIEEO-05

The main advantage of trading using opposite Zijin Mining and MEDIAN TECHNOLOGIEEO-05 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, MEDIAN TECHNOLOGIEEO-05 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 MEDIAN TECHNOLOGIEEO-05 will offset losses from the drop in MEDIAN TECHNOLOGIEEO-05's long position.

The idea behind Zijin Mining Group and MEDIAN TECHNOLOGIEEO 05 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.