Correlation Between Zijin Mining and COSMOSTEEL HLDGS

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

Diversification Opportunities for Zijin Mining and COSMOSTEEL HLDGS

-0.15

Correlation Coefficient

Zijin Mining  COSMOSTEEL HLDGS

Good diversification

The 3 months correlation between Zijin and COSMOSTEEL is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of Zijin Mining i.e., Zijin Mining and COSMOSTEEL HLDGS go up and down completely randomly.

Pair Corralation between Zijin Mining and COSMOSTEEL HLDGS

Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.08 times more return on investment than COSMOSTEEL HLDGS. However, Zijin Mining is 1.08 times more volatile than COSMOSTEEL HLDGS. It trades about 0.05 of its potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about 0.0 per unit of risk. If you would invest  122.00  in Zijin Mining Group on October 4, 2024 and sell it today you would earn a total of  59.00  from holding Zijin Mining Group or generate 48.36% 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.  COSMOSTEEL HLDGS

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

COSMOSTEEL HLDGS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COSMOSTEEL HLDGS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, COSMOSTEEL HLDGS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Zijin Mining and COSMOSTEEL HLDGS

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

The idea behind Zijin Mining Group and COSMOSTEEL HLDGS 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.