Correlation Between ZK International and Gold Resource

Can any of the company-specific risk be diversified away by investing in both ZK International and Gold Resource 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 ZK International and Gold Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZK International Group and Gold Resource, you can compare the effects of market volatilities on ZK International and Gold Resource 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 ZK International with a short position of Gold Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZK International and Gold Resource.

Diversification Opportunities for ZK International and Gold Resource

-0.74

Correlation Coefficient

ZK International  Gold Resource

Pay attention - limited upside

The 3 months correlation between ZKIN and Gold is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ZK International Group and Gold Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Resource and ZK International 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 ZK International Group are associated (or correlated) with Gold Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Resource has no effect on the direction of ZK International i.e., ZK International and Gold Resource go up and down completely randomly.

Pair Corralation between ZK International and Gold Resource

Given the investment horizon of 90 days ZK International Group is expected to under-perform the Gold Resource. But the stock apears to be less risky and, when comparing its historical volatility, ZK International Group is 1.05 times less risky than Gold Resource. The stock trades about -0.21 of its potential returns per unit of risk. The Gold Resource is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Gold Resource on December 27, 2024 and sell it today you would earn a total of  35.00  from holding Gold Resource or generate 152.17% return on investment over 90 days.

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

ZK International Group  vs.  Gold Resource

ZK International

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZK International Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Gold Resource

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Resource are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Gold Resource displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZK International and Gold Resource

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

The idea behind ZK International Group and Gold Resource 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.