Correlation Between Zijin Mining and ADAMA
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By analyzing existing cross correlation between Zijin Mining Group and ADAMA, you can compare the effects of market volatilities on Zijin Mining and ADAMA 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 ADAMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and ADAMA.
Diversification Opportunities for Zijin Mining and ADAMA
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and ADAMA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and ADAMA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADAMA 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 ADAMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADAMA has no effect on the direction of Zijin Mining i.e., Zijin Mining and ADAMA go up and down completely randomly.
Pair Corralation between Zijin Mining and ADAMA
Assuming the 90 days trading horizon Zijin Mining Group is expected to generate 0.54 times more return on investment than ADAMA. However, Zijin Mining Group is 1.84 times less risky than ADAMA. It trades about -0.23 of its potential returns per unit of risk. ADAMA is currently generating about -0.35 per unit of risk. If you would invest 1,722 in Zijin Mining Group on August 30, 2024 and sell it today you would lose (154.00) from holding Zijin Mining Group or give up 8.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. ADAMA
Performance |
| Timeline |
| Zijin Mining Group |
| ADAMA |
Zijin Mining and ADAMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and ADAMA
The main advantage of trading using opposite Zijin Mining and ADAMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, ADAMA 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 ADAMA will offset losses from the drop in ADAMA's long position.| Zijin Mining vs. Wanhua Chemical Group | Zijin Mining vs. Baoshan Iron Steel | Zijin Mining vs. Rongsheng Petrochemical Co | Zijin Mining vs. Hoshine Silicon Ind |
| ADAMA vs. Zijin Mining Group | ADAMA vs. Wanhua Chemical Group | ADAMA vs. Baoshan Iron Steel | ADAMA vs. Shandong Gold Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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