Correlation Between Zijin Mining and Vinci S

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

Diversification Opportunities for Zijin Mining and Vinci S

0.6

Correlation Coefficient

Zijin Mining  Vinci S

Poor diversification

The 3 months correlation between Zijin and Vinci is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Vinci S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci S A 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 Vinci S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci S A has no effect on the direction of Zijin Mining i.e., Zijin Mining and Vinci S go up and down completely randomly.

Pair Corralation between Zijin Mining and Vinci S

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Vinci S. In addition to that, Zijin Mining is 4.71 times more volatile than Vinci S A. It trades about -0.11 of its total potential returns per unit of risk. Vinci S A is currently generating about 0.0 per unit of volatility. If you would invest  10,140  in Vinci S A on October 10, 2024 and sell it today you would lose (10.00) from holding Vinci S A or give up 0.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

Zijin Mining Group  vs.  Vinci S A

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.

Vinci S A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci S A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vinci S is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Zijin Mining and Vinci S

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

The idea behind Zijin Mining Group and Vinci S A 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.