Correlation Between Zijin Mining and Adobe

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

Diversification Opportunities for Zijin Mining and Adobe

-0.18

Correlation Coefficient

Zijin Mining  Adobe

Good diversification

The 3 months correlation between Zijin and Adobe is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc 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 Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of Zijin Mining i.e., Zijin Mining and Adobe go up and down completely randomly.

Pair Corralation between Zijin Mining and Adobe

Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.33 times more return on investment than Adobe. However, Zijin Mining is 1.33 times more volatile than Adobe Inc. It trades about 0.13 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.13 per unit of risk. If you would invest  167.00  in Zijin Mining Group on December 21, 2024 and sell it today you would earn a total of  36.00  from holding Zijin Mining Group or generate 21.56% return on investment over 90 days.

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

Zijin Mining Group  vs.  Adobe Inc

Zijin Mining Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zijin Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Adobe Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adobe Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Zijin Mining and Adobe

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

The idea behind Zijin Mining Group and Adobe Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.