Correlation Between Zijin Mining and Roscan Gold
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Roscan Gold 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 Roscan Gold 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 Roscan Gold Corp, you can compare the effects of market volatilities on Zijin Mining and Roscan Gold 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 Roscan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Roscan Gold.
Diversification Opportunities for Zijin Mining and Roscan Gold
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Roscan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Roscan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roscan Gold Corp 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 Roscan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roscan Gold Corp has no effect on the direction of Zijin Mining i.e., Zijin Mining and Roscan Gold go up and down completely randomly.
Pair Corralation between Zijin Mining and Roscan Gold
Assuming the 90 days horizon Zijin Mining Group is expected to generate 0.51 times more return on investment than Roscan Gold. However, Zijin Mining Group is 1.97 times less risky than Roscan Gold. It trades about -0.06 of its potential returns per unit of risk. Roscan Gold Corp is currently generating about -0.03 per unit of risk. If you would invest 220.00 in Zijin Mining Group on November 1, 2024 and sell it today you would lose (32.00) from holding Zijin Mining Group or give up 14.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Zijin Mining Group vs. Roscan Gold Corp
Performance |
| Timeline |
| Zijin Mining Group |
| Roscan Gold Corp |
Zijin Mining and Roscan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Roscan Gold
The main advantage of trading using opposite Zijin Mining and Roscan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Roscan Gold 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 Roscan Gold will offset losses from the drop in Roscan Gold'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 |
| Roscan Gold vs. Aurion Resources | Roscan Gold vs. Minera Alamos | Roscan Gold vs. Rio2 Limited | Roscan Gold vs. Kalo Gold Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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