Correlation Between Zijin Mining and Guangzhou Jointas
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By analyzing existing cross correlation between Zijin Mining Group and Guangzhou Jointas Chemical, you can compare the effects of market volatilities on Zijin Mining and Guangzhou Jointas 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 Guangzhou Jointas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Guangzhou Jointas.
Diversification Opportunities for Zijin Mining and Guangzhou Jointas
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zijin and Guangzhou is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Guangzhou Jointas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Jointas 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 Guangzhou Jointas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Jointas has no effect on the direction of Zijin Mining i.e., Zijin Mining and Guangzhou Jointas go up and down completely randomly.
Pair Corralation between Zijin Mining and Guangzhou Jointas
Assuming the 90 days trading horizon Zijin Mining Group is expected to under-perform the Guangzhou Jointas. But the stock apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 1.73 times less risky than Guangzhou Jointas. The stock trades about -0.24 of its potential returns per unit of risk. The Guangzhou Jointas Chemical is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 502.00 in Guangzhou Jointas Chemical on August 31, 2024 and sell it today you would earn a total of 45.00 from holding Guangzhou Jointas Chemical or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Guangzhou Jointas Chemical
Performance |
| Timeline |
| Zijin Mining Group |
| Guangzhou Jointas |
Zijin Mining and Guangzhou Jointas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Guangzhou Jointas
The main advantage of trading using opposite Zijin Mining and Guangzhou Jointas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Guangzhou Jointas 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 Guangzhou Jointas will offset losses from the drop in Guangzhou Jointas' long position.The idea behind Zijin Mining Group and Guangzhou Jointas Chemical 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.| Guangzhou Jointas vs. Zijin Mining Group | Guangzhou Jointas vs. Baoshan Iron Steel | Guangzhou Jointas vs. Rongsheng Petrochemical Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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