Correlation Between Kirkland Lake and Zijin Mining

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

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

Diversification Opportunities for Kirkland Lake and Zijin Mining

0.0

Correlation Coefficient

Kirkland Lake  Zijin Mining

Pay attention - limited upside

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

Pair Corralation between Kirkland Lake and Zijin Mining

If you would invest  3,899  in Zijin Mining Group on January 25, 2024 and sell it today you would earn a total of  460.00  from holding Zijin Mining Group or generate 11.8% return on investment over 90 days.

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

Kirkland Lake Gold  vs.  Zijin Mining Group

Kirkland Lake Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kirkland Lake Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Kirkland Lake is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Zijin Mining Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zijin Mining Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Zijin Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kirkland Lake and Zijin Mining

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

The idea behind Kirkland Lake Gold and Zijin Mining Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.