Correlation Between Qinghai Salt and Zijin Mining
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By analyzing existing cross correlation between Qinghai Salt Lake and Zijin Mining Group, you can compare the effects of market volatilities on Qinghai Salt 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 Qinghai Salt with a short position of Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qinghai Salt and Zijin Mining.
Diversification Opportunities for Qinghai Salt and Zijin Mining
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Qinghai and Zijin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Qinghai Salt Lake 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 Qinghai Salt 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 Qinghai Salt Lake 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 Qinghai Salt i.e., Qinghai Salt and Zijin Mining go up and down completely randomly.
Pair Corralation between Qinghai Salt and Zijin Mining
Assuming the 90 days trading horizon Qinghai Salt Lake is expected to under-perform the Zijin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Qinghai Salt Lake is 1.19 times less risky than Zijin Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Zijin Mining Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,549 in Zijin Mining Group on November 7, 2024 and sell it today you would earn a total of 75.00 from holding Zijin Mining Group or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qinghai Salt Lake vs. Zijin Mining Group
Performance |
| Timeline |
| Qinghai Salt Lake |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zijin Mining Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Qinghai Salt and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qinghai Salt and Zijin Mining
The main advantage of trading using opposite Qinghai Salt and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qinghai Salt 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 Qinghai Salt Lake 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.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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