Correlation Between GALENA MINING and China Resources

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

By analyzing existing cross correlation between GALENA MINING LTD and China Resources Gas, you can compare the effects of market volatilities on GALENA MINING and China Resources 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 GALENA MINING with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and China Resources.

Diversification Opportunities for GALENA MINING and China Resources

0.0

Correlation Coefficient

GALENA MINING  China Resources

Pay attention - limited upside

The 3 months correlation between GALENA and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD and China Resources Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Gas and GALENA 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 GALENA MINING LTD are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Gas has no effect on the direction of GALENA MINING i.e., GALENA MINING and China Resources go up and down completely randomly.

Pair Corralation between GALENA MINING and China Resources

If you would invest  318.00  in China Resources Gas on September 13, 2024 and sell it today you would earn a total of  40.00  from holding China Resources Gas or generate 12.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

GALENA MINING LTD  vs.  China Resources Gas

GALENA MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

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

China Resources Gas

Risk-Adjusted Performance

6 of 100

Modest

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

Pair Trading with GALENA MINING and China Resources

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

The idea behind GALENA MINING LTD and China Resources Gas 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.