Correlation Between Liberty Gold and Zhaojin Mining
Can any of the company-specific risk be diversified away by investing in both Liberty Gold and Zhaojin Mining 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 Liberty Gold and Zhaojin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Gold Corp and Zhaojin Mining Industry, you can compare the effects of market volatilities on Liberty Gold and Zhaojin Mining 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 Liberty Gold with a short position of Zhaojin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Zhaojin Mining.
Diversification Opportunities for Liberty Gold and Zhaojin Mining
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Liberty and Zhaojin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Zhaojin Mining Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhaojin Mining Industry and Liberty Gold 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 Liberty Gold Corp are associated (or correlated) with Zhaojin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhaojin Mining Industry has no effect on the direction of Liberty Gold i.e., Liberty Gold and Zhaojin Mining go up and down completely randomly.
Pair Corralation between Liberty Gold and Zhaojin Mining
Assuming the 90 days horizon Liberty Gold is expected to generate 1.88 times less return on investment than Zhaojin Mining. In addition to that, Liberty Gold is 2.06 times more volatile than Zhaojin Mining Industry. It trades about 0.02 of its total potential returns per unit of risk. Zhaojin Mining Industry is currently generating about 0.06 per unit of volatility. If you would invest 125.00 in Zhaojin Mining Industry on August 26, 2024 and sell it today you would earn a total of 23.00 from holding Zhaojin Mining Industry or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 62.25% |
| Values | Daily Returns |
Liberty Gold Corp vs. Zhaojin Mining Industry
Performance |
| Timeline |
| Liberty Gold Corp |
| Zhaojin Mining Industry |
Liberty Gold and Zhaojin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and Zhaojin Mining
The main advantage of trading using opposite Liberty Gold and Zhaojin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold position performs unexpectedly, Zhaojin Mining 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 Zhaojin Mining will offset losses from the drop in Zhaojin Mining's long position.| Liberty Gold vs. Ascendant Resources | Liberty Gold vs. Cantex Mine Development | Liberty Gold vs. Amarc Resources | Liberty Gold vs. Sterling Metals Corp |
| Zhaojin Mining vs. Aurion Resources | Zhaojin Mining vs. Liberty Gold Corp | Zhaojin Mining vs. Orezone Gold Corp | Zhaojin Mining vs. Radisson Mining Resources |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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