Correlation Between Zijin Mining and Inmobiliaria Colonial

Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Inmobiliaria Colonial 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 Inmobiliaria Colonial 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 Inmobiliaria Colonial SOCIMI, you can compare the effects of market volatilities on Zijin Mining and Inmobiliaria Colonial 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 Inmobiliaria Colonial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Inmobiliaria Colonial.

Diversification Opportunities for Zijin Mining and Inmobiliaria Colonial

0.6

Correlation Coefficient

Zijin Mining  Inmobiliaria Colonial

Poor diversification

The 3 months correlation between Zijin and Inmobiliaria is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Inmobiliaria Colonial SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inmobiliaria Colonial 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 Inmobiliaria Colonial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inmobiliaria Colonial has no effect on the direction of Zijin Mining i.e., Zijin Mining and Inmobiliaria Colonial go up and down completely randomly.

Pair Corralation between Zijin Mining and Inmobiliaria Colonial

Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.89 times more return on investment than Inmobiliaria Colonial. However, Zijin Mining is 1.89 times more volatile than Inmobiliaria Colonial SOCIMI. It trades about -0.09 of its potential returns per unit of risk. Inmobiliaria Colonial SOCIMI is currently generating about -0.3 per unit of risk. If you would invest  183.00  in Zijin Mining Group on September 22, 2024 and sell it today you would lose (12.00) from holding Zijin Mining Group or give up 6.56% of portfolio value over 90 days.

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

Zijin Mining Group  vs.  Inmobiliaria Colonial SOCIMI

Zijin Mining Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Inmobiliaria Colonial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inmobiliaria Colonial SOCIMI 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 fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Zijin Mining and Inmobiliaria Colonial

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

The idea behind Zijin Mining Group and Inmobiliaria Colonial SOCIMI 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.