Correlation Between ZincX Resources and Global Li-Ion
Can any of the company-specific risk be diversified away by investing in both ZincX Resources and Global Li-Ion 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 Global Li-Ion 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 Global Li Ion Graphite, you can compare the effects of market volatilities on ZincX Resources and Global Li-Ion 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 Global Li-Ion. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZincX Resources and Global Li-Ion.
Diversification Opportunities for ZincX Resources and Global Li-Ion
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ZincX and Global is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ZincX Resources Corp and Global Li Ion Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Li Ion 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 Global Li-Ion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Li Ion has no effect on the direction of ZincX Resources i.e., ZincX Resources and Global Li-Ion go up and down completely randomly.
Pair Corralation between ZincX Resources and Global Li-Ion
Assuming the 90 days horizon ZincX Resources is expected to generate 8.79 times less return on investment than Global Li-Ion. But when comparing it to its historical volatility, ZincX Resources Corp is 4.28 times less risky than Global Li-Ion. It trades about 0.04 of its potential returns per unit of risk. Global Li Ion Graphite is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2.15 in Global Li Ion Graphite on August 25, 2024 and sell it today you would lose (1.11) from holding Global Li Ion Graphite or give up 51.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZincX Resources Corp vs. Global Li Ion Graphite
Performance |
| Timeline |
| ZincX Resources Corp |
| Global Li Ion |
ZincX Resources and Global Li-Ion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZincX Resources and Global Li-Ion
The main advantage of trading using opposite ZincX Resources and Global Li-Ion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZincX Resources position performs unexpectedly, Global Li-Ion 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 Global Li-Ion will offset losses from the drop in Global Li-Ion'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 |
| Global Li-Ion vs. Norra Metals Corp | Global Li-Ion vs. ZincX Resources Corp | Global Li-Ion vs. Nuinsco Resources Limited | Global Li-Ion vs. South Star Battery |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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