Correlation Between Zinc One and Golden Lake

Can any of the company-specific risk be diversified away by investing in both Zinc One and Golden Lake 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 Zinc One and Golden Lake into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zinc One Resources and Golden Lake Exploration, you can compare the effects of market volatilities on Zinc One and Golden Lake 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 Zinc One with a short position of Golden Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinc One and Golden Lake.

Diversification Opportunities for Zinc One and Golden Lake

0.0

Correlation Coefficient

Zinc One  Golden Lake

Pay attention - limited upside

The 3 months correlation between Zinc and Golden is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zinc One Resources and Golden Lake Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Lake Exploration and Zinc One 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 Zinc One Resources are associated (or correlated) with Golden Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Lake Exploration has no effect on the direction of Zinc One i.e., Zinc One and Golden Lake go up and down completely randomly.

Pair Corralation between Zinc One and Golden Lake

If you would invest  2.95  in Golden Lake Exploration on December 2, 2024 and sell it today you would earn a total of  0.54  from holding Golden Lake Exploration or generate 18.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Zinc One Resources  vs.  Golden Lake Exploration

Zinc One Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zinc One Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Zinc One is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Golden Lake Exploration

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Lake Exploration are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Golden Lake reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zinc One and Golden Lake

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

The idea behind Zinc One Resources and Golden Lake Exploration 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.