Correlation Between Chalice Mining and ZIJIN MINH

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

By analyzing existing cross correlation between Chalice Mining Limited and ZIJIN MINH UNSPADR20, you can compare the effects of market volatilities on Chalice Mining and ZIJIN MINH 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 Chalice Mining with a short position of ZIJIN MINH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalice Mining and ZIJIN MINH.

Diversification Opportunities for Chalice Mining and ZIJIN MINH

0.46

Correlation Coefficient

Chalice Mining  ZIJIN MINH

Very weak diversification

The 3 months correlation between Chalice and ZIJIN is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and ZIJIN MINH UNSPADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIJIN MINH UNSPADR20 and Chalice 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 Chalice Mining Limited are associated (or correlated) with ZIJIN MINH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIJIN MINH UNSPADR20 has no effect on the direction of Chalice Mining i.e., Chalice Mining and ZIJIN MINH go up and down completely randomly.

Pair Corralation between Chalice Mining and ZIJIN MINH

Assuming the 90 days horizon Chalice Mining Limited is expected to under-perform the ZIJIN MINH. In addition to that, Chalice Mining is 1.27 times more volatile than ZIJIN MINH UNSPADR20. It trades about -0.04 of its total potential returns per unit of risk. ZIJIN MINH UNSPADR20 is currently generating about -0.01 per unit of volatility. If you would invest  3,460  in ZIJIN MINH UNSPADR20 on September 22, 2024 and sell it today you would lose (200.00) from holding ZIJIN MINH UNSPADR20 or give up 5.78% of portfolio value over 90 days.

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

Chalice Mining Limited  vs.  ZIJIN MINH UNSPADR20

Chalice Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chalice Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ZIJIN MINH UNSPADR20

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZIJIN MINH UNSPADR20 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ZIJIN MINH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Chalice Mining and ZIJIN MINH

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

The idea behind Chalice Mining Limited and ZIJIN MINH UNSPADR20 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.