Correlation Between Zijin Mining and Antilles Gold

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

Diversification Opportunities for Zijin Mining and Antilles Gold

-0.6

Correlation Coefficient

Zijin Mining  Antilles Gold

Excellent diversification

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

Pair Corralation between Zijin Mining and Antilles Gold

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Antilles Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 4.12 times less risky than Antilles Gold. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Antilles Gold Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Antilles Gold Limited on September 3, 2024 and sell it today you would lose (0.40) from holding Antilles Gold Limited or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Zijin Mining Group  vs.  Antilles Gold Limited

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. In spite of fairly strong primary indicators, Zijin Mining is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Antilles Gold Limited

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Antilles Gold Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Antilles Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zijin Mining and Antilles Gold

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

The idea behind Zijin Mining Group and Antilles Gold Limited 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.