Correlation Between ZincX Resources and Vendetta Mining

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

Diversification Opportunities for ZincX Resources and Vendetta Mining

0.3

Correlation Coefficient

ZincX Resources  Vendetta Mining

Weak diversification

The 3 months correlation between ZincX and Vendetta is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ZincX Resources Corp and Vendetta Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vendetta Mining Corp 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 Vendetta Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vendetta Mining Corp has no effect on the direction of ZincX Resources i.e., ZincX Resources and Vendetta Mining go up and down completely randomly.

Pair Corralation between ZincX Resources and Vendetta Mining

Assuming the 90 days horizon ZincX Resources is expected to generate 16.47 times less return on investment than Vendetta Mining. But when comparing it to its historical volatility, ZincX Resources Corp is 5.75 times less risky than Vendetta Mining. It trades about 0.02 of its potential returns per unit of risk. Vendetta Mining Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3.90  in Vendetta Mining Corp on September 3, 2024 and sell it today you would lose (3.14) from holding Vendetta Mining Corp or give up 80.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

ZincX Resources Corp  vs.  Vendetta Mining Corp

ZincX Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZincX Resources 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 basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vendetta Mining Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vendetta Mining Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vendetta Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZincX Resources and Vendetta Mining

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

The idea behind ZincX Resources Corp and Vendetta Mining 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.