Correlation Between Zijin Mining and Cassiar Gold

Can any of the company-specific risk be diversified away by investing in both Zijin Mining and Cassiar 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 Cassiar 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 Cassiar Gold Corp, you can compare the effects of market volatilities on Zijin Mining and Cassiar 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 Cassiar Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zijin Mining and Cassiar Gold.

Diversification Opportunities for Zijin Mining and Cassiar Gold

0.8

Correlation Coefficient

Zijin Mining  Cassiar Gold

Very poor diversification

The 3 months correlation between Zijin and Cassiar is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zijin Mining Group and Cassiar Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cassiar Gold 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 Cassiar Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cassiar Gold Corp has no effect on the direction of Zijin Mining i.e., Zijin Mining and Cassiar Gold go up and down completely randomly.

Pair Corralation between Zijin Mining and Cassiar Gold

Assuming the 90 days horizon Zijin Mining Group is expected to under-perform the Cassiar Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Zijin Mining Group is 1.4 times less risky than Cassiar Gold. The pink sheet trades about -0.2 of its potential returns per unit of risk. The Cassiar Gold Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Cassiar Gold Corp on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Cassiar Gold Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Zijin Mining Group  vs.  Cassiar Gold Corp

Zijin Mining Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zijin Mining Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cassiar Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cassiar Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Zijin Mining and Cassiar Gold

The main advantage of trading using opposite Zijin Mining and Cassiar Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zijin Mining position performs unexpectedly, Cassiar 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 Cassiar Gold will offset losses from the drop in Cassiar Gold's long position.

The idea behind Zijin Mining Group and Cassiar Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.