Correlation Between ZincX Resources and Edison Cobalt

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

Diversification Opportunities for ZincX Resources and Edison Cobalt

-0.52

Correlation Coefficient

ZincX Resources  Edison Cobalt

Excellent diversification

The 3 months correlation between ZincX and Edison is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ZincX Resources Corp and Edison Cobalt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison Cobalt 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 Edison Cobalt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison Cobalt Corp has no effect on the direction of ZincX Resources i.e., ZincX Resources and Edison Cobalt go up and down completely randomly.

Pair Corralation between ZincX Resources and Edison Cobalt

Assuming the 90 days horizon ZincX Resources is expected to generate 2.56 times less return on investment than Edison Cobalt. In addition to that, ZincX Resources is 1.22 times more volatile than Edison Cobalt Corp. It trades about 0.03 of its total potential returns per unit of risk. Edison Cobalt Corp is currently generating about 0.08 per unit of volatility. If you would invest  6.50  in Edison Cobalt Corp on January 13, 2025 and sell it today you would earn a total of  1.20  from holding Edison Cobalt Corp or generate 18.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.97%
Values	Daily Returns

ZincX Resources Corp  vs.  Edison Cobalt Corp

ZincX Resources Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ZincX Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ZincX Resources may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Edison Cobalt Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Edison Cobalt Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Edison Cobalt reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZincX Resources and Edison Cobalt

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

The idea behind ZincX Resources Corp and Edison Cobalt 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.