Correlation Between Zijin Mining and Lier Chemical
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By analyzing existing cross correlation between Zijin Mining Group and Lier Chemical Co, you can compare the effects of market volatilities on Zijin Mining and Lier Chemical 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 Lier Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Lier Chemical.
Diversification Opportunities for Zijin Mining and Lier Chemical
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Lier is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Lier Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lier Chemical 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 Lier Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lier Chemical has no effect on the direction of Zijin Mining i.e., Zijin Mining and Lier Chemical go up and down completely randomly.
Pair Corralation between Zijin Mining and Lier Chemical
Assuming the 90 days trading horizon Zijin Mining Group is expected to under-perform the Lier Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 1.42 times less risky than Lier Chemical. The stock trades about -0.27 of its potential returns per unit of risk. The Lier Chemical Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 827.00 in Lier Chemical Co on September 5, 2024 and sell it today you would earn a total of 67.00 from holding Lier Chemical Co or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Lier Chemical Co
Performance |
| Timeline |
| Zijin Mining Group |
| Lier Chemical |
Zijin Mining and Lier Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Lier Chemical
The main advantage of trading using opposite Zijin Mining and Lier Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Lier Chemical 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 Lier Chemical will offset losses from the drop in Lier Chemical's long position.| Zijin Mining vs. Wanhua Chemical Group | Zijin Mining vs. Baoshan Iron Steel | Zijin Mining vs. Rongsheng Petrochemical Co | Zijin Mining vs. Shandong Gold Mining |
| Lier Chemical vs. Anhui Huilong Agricultural | Lier Chemical vs. Qijing Machinery | Lier Chemical vs. Rising Nonferrous Metals | Lier Chemical vs. Huasi Agricultural Development |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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