Correlation Between EMX Royalty and Zacapa Resources

Can any of the company-specific risk be diversified away by investing in both EMX Royalty and Zacapa Resources 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 EMX Royalty and Zacapa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EMX Royalty Corp and Zacapa Resources, you can compare the effects of market volatilities on EMX Royalty and Zacapa Resources 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 EMX Royalty with a short position of Zacapa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMX Royalty and Zacapa Resources.

Diversification Opportunities for EMX Royalty and Zacapa Resources

0.12

Correlation Coefficient

EMX Royalty  Zacapa Resources

Average diversification

The 3 months correlation between EMX and Zacapa is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding EMX Royalty Corp and Zacapa Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zacapa Resources and EMX Royalty 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 EMX Royalty Corp are associated (or correlated) with Zacapa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zacapa Resources has no effect on the direction of EMX Royalty i.e., EMX Royalty and Zacapa Resources go up and down completely randomly.

Pair Corralation between EMX Royalty and Zacapa Resources

If you would invest  3.23  in Zacapa Resources on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Zacapa Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

EMX Royalty Corp  vs.  Zacapa Resources

EMX Royalty Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EMX Royalty Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, EMX Royalty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Zacapa Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with EMX Royalty and Zacapa Resources

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

The idea behind EMX Royalty Corp and Zacapa Resources 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.