Correlation Between Peak Minerals and Zijin Mining

Can any of the company-specific risk be diversified away by investing in both Peak Minerals and Zijin Mining 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 Peak Minerals and Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Peak Minerals Limited and Zijin Mining Group, you can compare the effects of market volatilities on Peak Minerals and Zijin Mining 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 Peak Minerals with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peak Minerals and Zijin Mining.

Diversification Opportunities for Peak Minerals and Zijin Mining

-0.16

Correlation Coefficient

Peak Minerals  Zijin Mining

Good diversification

The 3 months correlation between Peak and Zijin is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Peak Minerals Limited and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining Group and Peak Minerals 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 Peak Minerals Limited are associated (or correlated) with Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of Peak Minerals i.e., Peak Minerals and Zijin Mining go up and down completely randomly.

Pair Corralation between Peak Minerals and Zijin Mining

Assuming the 90 days horizon Peak Minerals Limited is expected to generate 17.98 times more return on investment than Zijin Mining. However, Peak Minerals is 17.98 times more volatile than Zijin Mining Group. It trades about 0.14 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.08 per unit of risk. If you would invest  0.05  in Peak Minerals Limited on September 14, 2024 and sell it today you would earn a total of  0.35  from holding Peak Minerals Limited or generate 700.0% return on investment over 90 days.

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

Peak Minerals Limited  vs.  Zijin Mining Group

Peak Minerals Limited

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Peak Minerals Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Peak Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Zijin Mining Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zijin Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peak Minerals and Zijin Mining

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

The idea behind Peak Minerals Limited and Zijin Mining Group 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.