Correlation Between Zijin Mining and Hyster Yale

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

Diversification Opportunities for Zijin Mining and Hyster Yale

0.66

Correlation Coefficient

Zijin Mining  Hyster Yale

Poor diversification

The 3 months correlation between Zijin and Hyster is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials 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 Hyster Yale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of Zijin Mining i.e., Zijin Mining and Hyster Yale go up and down completely randomly.

Pair Corralation between Zijin Mining and Hyster Yale

Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.04 times more return on investment than Hyster Yale. However, Zijin Mining is 1.04 times more volatile than Hyster Yale Materials Handling. It trades about 0.06 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about 0.05 per unit of risk. If you would invest  80.00  in Zijin Mining Group on September 28, 2024 and sell it today you would earn a total of  87.00  from holding Zijin Mining Group or generate 108.75% return on investment over 90 days.

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

Zijin Mining Group  vs.  Hyster Yale Materials Handling

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hyster Yale Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyster Yale Materials Handling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Zijin Mining and Hyster Yale

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

The idea behind Zijin Mining Group and Hyster Yale Materials Handling 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.