Correlation Between NEXA RESOURCES and China Datang

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

By analyzing existing cross correlation between NEXA RESOURCES SA and China Datang, you can compare the effects of market volatilities on NEXA RESOURCES and China Datang 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 NEXA RESOURCES with a short position of China Datang. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and China Datang.

Diversification Opportunities for NEXA RESOURCES and China Datang

-0.65

Correlation Coefficient

NEXA RESOURCES  China Datang

Excellent diversification

The 3 months correlation between NEXA and China is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA and China Datang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Datang and NEXA RESOURCES 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 NEXA RESOURCES SA are associated (or correlated) with China Datang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Datang has no effect on the direction of NEXA RESOURCES i.e., NEXA RESOURCES and China Datang go up and down completely randomly.

Pair Corralation between NEXA RESOURCES and China Datang

Assuming the 90 days horizon NEXA RESOURCES SA is expected to under-perform the China Datang. In addition to that, NEXA RESOURCES is 1.01 times more volatile than China Datang. It trades about -0.11 of its total potential returns per unit of risk. China Datang is currently generating about 0.04 per unit of volatility. If you would invest  24.00  in China Datang on April 20, 2025 and sell it today you would earn a total of  1.00  from holding China Datang or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

NEXA RESOURCES SA  vs.  China Datang

NEXA RESOURCES SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEXA RESOURCES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

China Datang

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in China Datang are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, China Datang is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NEXA RESOURCES and China Datang

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

The idea behind NEXA RESOURCES SA and China Datang 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.