Correlation Between Zijin Mining and Torex Gold
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Torex 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 Torex 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 Torex Gold Resources, you can compare the effects of market volatilities on Zijin Mining and Torex 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 Torex Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Torex Gold.
Diversification Opportunities for Zijin Mining and Torex Gold
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zijin and Torex is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Torex Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torex Gold Resources 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 Torex Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torex Gold Resources has no effect on the direction of Zijin Mining i.e., Zijin Mining and Torex Gold go up and down completely randomly.
Pair Corralation between Zijin Mining and Torex Gold
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.05 times more return on investment than Torex Gold. However, Zijin Mining is 1.05 times more volatile than Torex Gold Resources. It trades about 0.08 of its potential returns per unit of risk. Torex Gold Resources is currently generating about -0.02 per unit of risk. If you would invest 182.00 in Zijin Mining Group on October 19, 2024 and sell it today you would earn a total of 18.00 from holding Zijin Mining Group or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zijin Mining Group vs. Torex Gold Resources
Performance |
| Timeline |
| Zijin Mining Group |
| Torex Gold Resources |
Zijin Mining and Torex Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Torex Gold
The main advantage of trading using opposite Zijin Mining and Torex Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Torex 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 Torex Gold will offset losses from the drop in Torex 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 |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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