Correlation Between Zijin Mining and MTI INVESTMENT

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

Diversification Opportunities for Zijin Mining and MTI INVESTMENT

0.65

Correlation Coefficient

Zijin Mining  MTI INVESTMENT

Poor diversification

The 3 months correlation between Zijin and MTI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and MTI INVESTMENT SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI INVESTMENT SE 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 MTI INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI INVESTMENT SE has no effect on the direction of Zijin Mining i.e., Zijin Mining and MTI INVESTMENT go up and down completely randomly.

Pair Corralation between Zijin Mining and MTI INVESTMENT

Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.75 times more return on investment than MTI INVESTMENT. However, Zijin Mining Group is 1.33 times less risky than MTI INVESTMENT. It trades about 0.05 of its potential returns per unit of risk. MTI INVESTMENT SE is currently generating about -0.05 per unit of risk. If you would invest  99.00  in Zijin Mining Group on October 10, 2024 and sell it today you would earn a total of  77.00  from holding Zijin Mining Group or generate 77.78% 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.  MTI INVESTMENT SE

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 uncertain 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.

MTI INVESTMENT SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MTI INVESTMENT SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Pair Trading with Zijin Mining and MTI INVESTMENT

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

The idea behind Zijin Mining Group and MTI INVESTMENT SE 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 Stocks Directory module to find actively traded stocks across global markets.