Correlation Between REYNA SILVER and ZIJIN MINH

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

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

Diversification Opportunities for REYNA SILVER and ZIJIN MINH

0.49

Correlation Coefficient

REYNA SILVER  ZIJIN MINH

Very weak diversification

The 3 months correlation between REYNA and ZIJIN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding REYNA SILVER P 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 REYNA SILVER 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 REYNA SILVER P 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 REYNA SILVER i.e., REYNA SILVER and ZIJIN MINH go up and down completely randomly.

Pair Corralation between REYNA SILVER and ZIJIN MINH

Assuming the 90 days horizon REYNA SILVER P is expected to under-perform the ZIJIN MINH. In addition to that, REYNA SILVER is 2.19 times more volatile than ZIJIN MINH UNSPADR20. It trades about -0.11 of its total potential returns per unit of risk. ZIJIN MINH UNSPADR20 is currently generating about -0.11 per unit of volatility. If you would invest  4,020  in ZIJIN MINH UNSPADR20 on April 4, 2024 and sell it today you would lose (300.00) from holding ZIJIN MINH UNSPADR20 or give up 7.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

REYNA SILVER P  vs.  ZIJIN MINH UNSPADR20

REYNA SILVER P

Risk-Adjusted Performance

0 of 100

Very Weak

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

ZIJIN MINH UNSPADR20

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ZIJIN MINH UNSPADR20 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 REYNA SILVER and ZIJIN MINH

The main advantage of trading using opposite REYNA SILVER and ZIJIN MINH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REYNA SILVER 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 REYNA SILVER P 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.