Correlation Between Zijin Mining and JJill

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

Diversification Opportunities for Zijin Mining and JJill

-0.67

Correlation Coefficient

Zijin Mining  JJill

Excellent diversification

The 3 months correlation between Zijin and JJill is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and JJill Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJill Inc 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 JJill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJill Inc has no effect on the direction of Zijin Mining i.e., Zijin Mining and JJill go up and down completely randomly.

Pair Corralation between Zijin Mining and JJill

Assuming the 90 days horizon Zijin Mining Group is expected to generate 3.09 times more return on investment than JJill. However, Zijin Mining is 3.09 times more volatile than JJill Inc. It trades about 0.06 of its potential returns per unit of risk. JJill Inc is currently generating about 0.02 per unit of risk. 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

Zijin Mining Group  vs.  JJill Inc

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.

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.

Pair Trading with Zijin Mining and JJill

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

The idea behind Zijin Mining Group and JJill Inc 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.