Correlation Between Zanaga Iron and GoldMining
Can any of the company-specific risk be diversified away by investing in both Zanaga Iron and GoldMining 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 Zanaga Iron and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zanaga Iron Ore and GoldMining, you can compare the effects of market volatilities on Zanaga Iron and GoldMining 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 Zanaga Iron with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zanaga Iron and GoldMining.
Diversification Opportunities for Zanaga Iron and GoldMining
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zanaga and GoldMining is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Zanaga Iron Ore and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Zanaga Iron 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 Zanaga Iron Ore are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Zanaga Iron i.e., Zanaga Iron and GoldMining go up and down completely randomly.
Pair Corralation between Zanaga Iron and GoldMining
Assuming the 90 days trading horizon Zanaga Iron Ore is expected to under-perform the GoldMining. In addition to that, Zanaga Iron is 1.23 times more volatile than GoldMining. It trades about -0.19 of its total potential returns per unit of risk. GoldMining is currently generating about 0.01 per unit of volatility. If you would invest 120.00 in GoldMining on September 3, 2024 and sell it today you would earn a total of 0.00 from holding GoldMining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
Zanaga Iron Ore vs. GoldMining
Performance |
| Timeline |
| Zanaga Iron Ore |
| GoldMining |
Zanaga Iron and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zanaga Iron and GoldMining
The main advantage of trading using opposite Zanaga Iron and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zanaga Iron position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Zanaga Iron vs. Givaudan SA | Zanaga Iron vs. Atalaya Mining | Zanaga Iron vs. Central Asia Metals | Zanaga Iron vs. Metals Exploration Plc |
| GoldMining vs. Catalyst Media Group | GoldMining vs. CATLIN GROUP | GoldMining vs. Tamburi Investment Partners | GoldMining vs. Magnora ASA |
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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