Correlation Between Zijin Mining and Apollo Medical

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

By analyzing existing cross correlation between Zijin Mining Group and Apollo Medical Holdings, you can compare the effects of market volatilities on Zijin Mining and Apollo Medical 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 Apollo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Apollo Medical.

Diversification Opportunities for Zijin Mining and Apollo Medical

-0.24

Correlation Coefficient

Zijin Mining  Apollo Medical

Very good diversification

The 3 months correlation between Zijin and Apollo is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical Holdings 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 Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of Zijin Mining i.e., Zijin Mining and Apollo Medical go up and down completely randomly.

Pair Corralation between Zijin Mining and Apollo Medical

Assuming the 90 days horizon Zijin Mining is expected to generate 1.2 times less return on investment than Apollo Medical. In addition to that, Zijin Mining is 2.98 times more volatile than Apollo Medical Holdings. It trades about 0.04 of its total potential returns per unit of risk. Apollo Medical Holdings is currently generating about 0.13 per unit of volatility. If you would invest  3,580  in Apollo Medical Holdings on September 3, 2024 and sell it today you would earn a total of  420.00  from holding Apollo Medical Holdings or generate 11.73% return on investment over 90 days.

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

Zijin Mining Group  vs.  Apollo Medical Holdings

Zijin Mining Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Zijin Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Apollo Medical Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Medical Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Apollo Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Zijin Mining and Apollo Medical

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

The idea behind Zijin Mining Group and Apollo Medical Holdings 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.