Correlation Between Zijin Mining and Graham Holdings

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

Diversification Opportunities for Zijin Mining and Graham Holdings

0.0

Correlation Coefficient

Zijin Mining  Graham Holdings

Pay attention - limited upside

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

Pair Corralation between Zijin Mining and Graham Holdings

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Graham Holdings. In addition to that, Zijin Mining is 1.24 times more volatile than Graham Holdings Co. It trades about -0.09 of its total potential returns per unit of risk. Graham Holdings Co is currently generating about 0.25 per unit of volatility. If you would invest  76,500  in Graham Holdings Co on September 3, 2024 and sell it today you would earn a total of  12,000  from holding Graham Holdings Co or generate 15.69% return on investment over 90 days.

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

Zijin Mining Group  vs.  Graham Holdings Co

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.

Graham Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Graham Holdings Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Graham Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zijin Mining and Graham Holdings

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

The idea behind Zijin Mining Group and Graham Holdings Co 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.