Correlation Between Zijin Mining and Kingsgate Consolidated

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

Diversification Opportunities for Zijin Mining and Kingsgate Consolidated

0.0

Correlation Coefficient

Zijin Mining  Kingsgate Consolidated

Pay attention - limited upside

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

Pair Corralation between Zijin Mining and Kingsgate Consolidated

If you would invest  2,822  in Zijin Mining Group on February 6, 2024 and sell it today you would earn a total of  1,592  from holding Zijin Mining Group or generate 56.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Zijin Mining Group  vs.  Kingsgate Consolidated Limited

Zijin Mining Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Zijin Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Kingsgate Consolidated

Risk-Adjusted Performance

0 of 100

Good

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

Pair Trading with Zijin Mining and Kingsgate Consolidated

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

The idea behind Zijin Mining Group and Kingsgate Consolidated 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.