Correlation Between Zijin Mining and VARIOUS EATERIES

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

Diversification Opportunities for Zijin Mining and VARIOUS EATERIES

0.55

Correlation Coefficient

Zijin Mining  VARIOUS EATERIES

Very weak diversification

The 3 months correlation between Zijin and VARIOUS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of Zijin Mining i.e., Zijin Mining and VARIOUS EATERIES go up and down completely randomly.

Pair Corralation between Zijin Mining and VARIOUS EATERIES

Assuming the 90 days horizon Zijin Mining Group is expected to generate 2.4 times more return on investment than VARIOUS EATERIES. However, Zijin Mining is 2.4 times more volatile than VARIOUS EATERIES LS. It trades about 0.01 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.04 per unit of risk. If you would invest  182.00  in Zijin Mining Group on September 1, 2024 and sell it today you would lose (5.00) from holding Zijin Mining Group or give up 2.75% of portfolio value over 90 days.

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

Zijin Mining Group  vs.  VARIOUS EATERIES LS

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 nearly stable basic indicators, Zijin Mining is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

VARIOUS EATERIES

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VARIOUS EATERIES LS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VARIOUS EATERIES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Zijin Mining and VARIOUS EATERIES

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

The idea behind Zijin Mining Group and VARIOUS EATERIES LS 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.