Correlation Between Zijin Mining and Elemental Royalties
Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Elemental Royalties 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 Elemental Royalties 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 Elemental Royalties Corp, you can compare the effects of market volatilities on Zijin Mining and Elemental Royalties 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 Elemental Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Elemental Royalties.
Diversification Opportunities for Zijin Mining and Elemental Royalties
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zijin and Elemental is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Elemental Royalties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elemental Royalties 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 Elemental Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elemental Royalties Corp has no effect on the direction of Zijin Mining i.e., Zijin Mining and Elemental Royalties go up and down completely randomly.
Pair Corralation between Zijin Mining and Elemental Royalties
Assuming the 90 days horizon Zijin Mining Group is expected to generate 1.45 times more return on investment than Elemental Royalties. However, Zijin Mining is 1.45 times more volatile than Elemental Royalties Corp. It trades about 0.04 of its potential returns per unit of risk. Elemental Royalties Corp is currently generating about 0.0 per unit of risk. If you would invest 2,735 in Zijin Mining Group on August 30, 2024 and sell it today you would earn a total of 1,160 from holding Zijin Mining Group or generate 42.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.06% |
| Values | Daily Returns |
Zijin Mining Group vs. Elemental Royalties Corp
Performance |
| Timeline |
| Zijin Mining Group |
| Elemental Royalties Corp |
Zijin Mining and Elemental Royalties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zijin Mining and Elemental Royalties
The main advantage of trading using opposite Zijin Mining and Elemental Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Elemental Royalties 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 Elemental Royalties will offset losses from the drop in Elemental Royalties' long position.| Zijin Mining vs. AngloGold Ashanti plc | Zijin Mining vs. Harmony Gold Mining | Zijin Mining vs. Eldorado Gold Corp | Zijin Mining vs. Kinross Gold |
| Elemental Royalties vs. Quebec Precious Metals | Elemental Royalties vs. Omineca Mining and | Elemental Royalties vs. Bluestone Resources | Elemental Royalties vs. Aurelius Minerals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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