Correlation Between Zijin Mining and Lion One
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on Zijin Mining and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Lion One.
Diversification Opportunities for Zijin Mining and Lion One
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Lion is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Zijin Mining i.e., Zijin Mining and Lion One go up and down completely randomly.
Pair Corralation between Zijin Mining and Lion One
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.94 times more return on investment than Lion One. However, Zijin Mining Group is 1.07 times less risky than Lion One. It trades about 0.07 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.08 per unit of risk. If you would invest 121.00 in Zijin Mining Group on September 2, 2024 and sell it today you would earn a total of 70.00 from holding Zijin Mining Group or generate 57.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.74% |
| Values | Daily Returns |
Zijin Mining Group vs. Lion One Metals
Performance |
| Timeline |
| Zijin Mining Group |
| Lion One Metals |
Zijin Mining and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Lion One
The main advantage of trading using opposite Zijin Mining and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| Zijin Mining vs. Torex Gold Resources | Zijin Mining vs. Wesdome Gold Mines | Zijin Mining vs. Northern Star Resources | Zijin Mining vs. Regis Resources |
| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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