Correlation Between Zijin Mining and North American

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

Diversification Opportunities for Zijin Mining and North American

-0.68

Correlation Coefficient

Zijin Mining  North American

Excellent diversification

The 3 months correlation between Zijin and North is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and North American Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Const 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 North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Const has no effect on the direction of Zijin Mining i.e., Zijin Mining and North American go up and down completely randomly.

Pair Corralation between Zijin Mining and North American

Assuming the 90 days horizon Zijin Mining is expected to generate 15.29 times less return on investment than North American. In addition to that, Zijin Mining is 1.41 times more volatile than North American Construction. It trades about 0.0 of its total potential returns per unit of risk. North American Construction is currently generating about 0.05 per unit of volatility. If you would invest  1,728  in North American Construction on September 26, 2024 and sell it today you would earn a total of  202.00  from holding North American Construction or generate 11.69% return on investment over 90 days.

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

Zijin Mining Group  vs.  North American Construction

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 fragile 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.

North American Const

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in North American Construction are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, North American reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zijin Mining and North American

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

The idea behind Zijin Mining Group and North American Construction 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.