Correlation Between ZincX Resources and Core Lithium
Can any of the company-specific risk be diversified away by investing in both ZincX Resources and Core Lithium 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 ZincX Resources and Core Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZincX Resources Corp and Core Lithium, you can compare the effects of market volatilities on ZincX Resources and Core Lithium 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 ZincX Resources with a short position of Core Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZincX Resources and Core Lithium.
Diversification Opportunities for ZincX Resources and Core Lithium
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ZincX and Core is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ZincX Resources Corp and Core Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Lithium and ZincX Resources 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 ZincX Resources Corp are associated (or correlated) with Core Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Lithium has no effect on the direction of ZincX Resources i.e., ZincX Resources and Core Lithium go up and down completely randomly.
Pair Corralation between ZincX Resources and Core Lithium
Assuming the 90 days horizon ZincX Resources Corp is expected to generate 0.66 times more return on investment than Core Lithium. However, ZincX Resources Corp is 1.51 times less risky than Core Lithium. It trades about 0.02 of its potential returns per unit of risk. Core Lithium is currently generating about -0.02 per unit of risk. If you would invest 6.00 in ZincX Resources Corp on September 3, 2024 and sell it today you would lose (1.00) from holding ZincX Resources Corp or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZincX Resources Corp vs. Core Lithium
Performance |
| Timeline |
| ZincX Resources Corp |
| Core Lithium |
ZincX Resources and Core Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZincX Resources and Core Lithium
The main advantage of trading using opposite ZincX Resources and Core Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZincX Resources position performs unexpectedly, Core Lithium 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 Core Lithium will offset losses from the drop in Core Lithium's long position.| ZincX Resources vs. Rokmaster Resources Corp | ZincX Resources vs. Tartisan Nickel Corp | ZincX Resources vs. VR Resources | ZincX Resources vs. Getchell Gold Corp |
| Core Lithium vs. Qubec Nickel Corp | Core Lithium vs. IGO Limited | Core Lithium vs. Avarone Metals | Core Lithium vs. Adriatic Metals PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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