Correlation Between Zijin Mining and 629377CH3

Can any of the company-specific risk be diversified away by investing in both Zijin Mining and 629377CH3 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 629377CH3 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 NRG Energy 525, you can compare the effects of market volatilities on Zijin Mining and 629377CH3 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 629377CH3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and 629377CH3.

Diversification Opportunities for Zijin Mining and 629377CH3

0.4

Correlation Coefficient

Zijin Mining  629377CH3

Very weak diversification

The 3 months correlation between Zijin and 629377CH3 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and NRG Energy 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy 525 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 629377CH3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy 525 has no effect on the direction of Zijin Mining i.e., Zijin Mining and 629377CH3 go up and down completely randomly.

Pair Corralation between Zijin Mining and 629377CH3

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the 629377CH3. In addition to that, Zijin Mining is 2.21 times more volatile than NRG Energy 525. It trades about -0.07 of its total potential returns per unit of risk. NRG Energy 525 is currently generating about -0.02 per unit of volatility. If you would invest  9,757  in NRG Energy 525 on October 7, 2024 and sell it today you would lose (182.00) from holding NRG Energy 525 or give up 1.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.56%
Values	Daily Returns

Zijin Mining Group  vs.  NRG Energy 525

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 primary 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.

NRG Energy 525

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NRG Energy 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 629377CH3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zijin Mining and 629377CH3

The main advantage of trading using opposite Zijin Mining and 629377CH3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, 629377CH3 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 629377CH3 will offset losses from the drop in 629377CH3's long position.

The idea behind Zijin Mining Group and NRG Energy 525 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.