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(YOU SUNG-HO/REUTERS)

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Look to South Korea for a read on Canadian mining

Canadian investors pay far less attention to South Korea than they do to China – and that’s a mistake. South Korea offers a much better read than its larger rival on where Canadian stocks are headed next.

The chart below demonstrates how the KOSPI, South Korea’s primary equity benchmark, and the S&P/TSX Diversified Mining Index have moved in tandem over recent years. The correlation between the two indexes is a remarkably high 0.92 – substantially higher than the correlation between domestic mining stocks and the Shanghai composite.