Correlation Between Zijin Mining and Netflix

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

Diversification Opportunities for Zijin Mining and Netflix

-0.53

Correlation Coefficient

Zijin Mining  Netflix

Excellent diversification

The 3 months correlation between Zijin and Netflix is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix 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 Netflix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netflix has no effect on the direction of Zijin Mining i.e., Zijin Mining and Netflix go up and down completely randomly.

Pair Corralation between Zijin Mining and Netflix

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Netflix. In addition to that, Zijin Mining is 2.46 times more volatile than Netflix. It trades about -0.07 of its total potential returns per unit of risk. Netflix is currently generating about 0.32 per unit of volatility. If you would invest  72,480  in Netflix on October 7, 2024 and sell it today you would earn a total of  14,010  from holding Netflix or generate 19.33% return on investment over 90 days.

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

Zijin Mining Group  vs.  Netflix

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.

Netflix

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Netflix are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Netflix reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zijin Mining and Netflix

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

The idea behind Zijin Mining Group and Netflix 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.