Correlation Between Global Li-Ion and ZincX Resources
Can any of the company-specific risk be diversified away by investing in both Global Li-Ion and ZincX 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 Global Li-Ion and ZincX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Li Ion Graphite and ZincX Resources Corp, you can compare the effects of market volatilities on Global Li-Ion and ZincX 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 Global Li-Ion with a short position of ZincX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Li-Ion and ZincX Resources.
Diversification Opportunities for Global Li-Ion and ZincX Resources
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and ZincX is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global Li Ion Graphite and ZincX Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZincX Resources Corp and Global Li-Ion 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 Global Li Ion Graphite are associated (or correlated) with ZincX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZincX Resources Corp has no effect on the direction of Global Li-Ion i.e., Global Li-Ion and ZincX Resources go up and down completely randomly.
Pair Corralation between Global Li-Ion and ZincX Resources
Assuming the 90 days horizon Global Li Ion Graphite is expected to generate 4.28 times more return on investment than ZincX Resources. However, Global Li-Ion is 4.28 times more volatile than ZincX Resources Corp. It trades about 0.08 of its potential returns per unit of risk. ZincX Resources Corp is currently generating about 0.04 per unit of risk. If you would invest 2.15 in Global Li Ion Graphite on August 25, 2024 and sell it today you would lose (1.11) from holding Global Li Ion Graphite or give up 51.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Li Ion Graphite vs. ZincX Resources Corp
Performance |
| Timeline |
| Global Li Ion |
| ZincX Resources Corp |
Global Li-Ion and ZincX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Li-Ion and ZincX Resources
The main advantage of trading using opposite Global Li-Ion and ZincX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Li-Ion position performs unexpectedly, ZincX 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 ZincX Resources will offset losses from the drop in ZincX Resources' long position.| Global Li-Ion vs. Norra Metals Corp | Global Li-Ion vs. ZincX Resources Corp | Global Li-Ion vs. Nuinsco Resources Limited | Global Li-Ion vs. South Star Battery |
| ZincX Resources vs. Rokmaster Resources Corp | ZincX Resources vs. Tartisan Nickel Corp | ZincX Resources vs. VR Resources | ZincX Resources vs. Getchell Gold Corp |
Check out your portfolio center.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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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