Correlation Between JJill and Zijin Mining

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

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

Diversification Opportunities for JJill and Zijin Mining

-0.67

Correlation Coefficient

JJill  Zijin Mining

Excellent diversification

The 3 months correlation between JJill and Zijin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding JJill Inc 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 JJill 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 JJill Inc 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 JJill i.e., JJill and Zijin Mining go up and down completely randomly.

Pair Corralation between JJill and Zijin Mining

Given the investment horizon of 90 days JJill is expected to generate 11.3 times less return on investment than Zijin Mining. But when comparing it to its historical volatility, JJill Inc is 3.09 times less risky than Zijin Mining. It trades about 0.02 of its potential returns per unit of risk. Zijin Mining Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Zijin Mining Group on September 21, 2024 and sell it today you would earn a total of  90.00  from holding Zijin Mining Group or generate 94.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.71%
Values	Daily Returns

JJill Inc  vs.  Zijin Mining Group

JJill Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JJill Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, JJill is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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 nearly stable primary indicators, Zijin Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with JJill and Zijin Mining

The main advantage of trading using opposite JJill and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JJill 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 JJill Inc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.