Correlation Between Metallurgicalof China and Zhaojin Mining

Can any of the company-specific risk be diversified away by investing in both Metallurgicalof China and Zhaojin Mining 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 Metallurgicalof China and Zhaojin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Metallurgical of and Zhaojin Mining Industry, you can compare the effects of market volatilities on Metallurgicalof China and Zhaojin 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 Metallurgicalof China with a short position of Zhaojin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metallurgicalof China and Zhaojin Mining.

Diversification Opportunities for Metallurgicalof China and Zhaojin Mining

-0.03

Correlation Coefficient

Metallurgicalof China  Zhaojin Mining

Good diversification

The 3 months correlation between Metallurgicalof and Zhaojin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Metallurgical of and Zhaojin Mining Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhaojin Mining Industry and Metallurgicalof China 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 Metallurgical of are associated (or correlated) with Zhaojin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhaojin Mining Industry has no effect on the direction of Metallurgicalof China i.e., Metallurgicalof China and Zhaojin Mining go up and down completely randomly.

Pair Corralation between Metallurgicalof China and Zhaojin Mining

Assuming the 90 days horizon Metallurgical of is expected to generate 1.45 times more return on investment than Zhaojin Mining. However, Metallurgicalof China is 1.45 times more volatile than Zhaojin Mining Industry. It trades about 0.11 of its potential returns per unit of risk. Zhaojin Mining Industry is currently generating about 0.08 per unit of risk. If you would invest  15.00  in Metallurgical of on April 25, 2025 and sell it today you would earn a total of  4.00  from holding Metallurgical of or generate 26.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Metallurgical of  vs.  Zhaojin Mining Industry

Metallurgicalof China

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metallurgical of are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Metallurgicalof China reported solid returns over the last few months and may actually be approaching a breakup point.

Zhaojin Mining Industry

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zhaojin Mining Industry are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Zhaojin Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Metallurgicalof China and Zhaojin Mining

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

The idea behind Metallurgical of and Zhaojin Mining Industry 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..