Correlation Between Indutrade and Zinc Media
Can any of the company-specific risk be diversified away by investing in both Indutrade and Zinc Media 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 Indutrade and Zinc Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Zinc Media Group, you can compare the effects of market volatilities on Indutrade and Zinc Media 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 Indutrade with a short position of Zinc Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Zinc Media.
Diversification Opportunities for Indutrade and Zinc Media
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Indutrade and Zinc is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Zinc Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinc Media Group and Indutrade 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 Indutrade AB are associated (or correlated) with Zinc Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinc Media Group has no effect on the direction of Indutrade i.e., Indutrade and Zinc Media go up and down completely randomly.
Pair Corralation between Indutrade and Zinc Media
Assuming the 90 days trading horizon Indutrade is expected to generate 2.17 times less return on investment than Zinc Media. But when comparing it to its historical volatility, Indutrade AB is 1.08 times less risky than Zinc Media. It trades about 0.17 of its potential returns per unit of risk. Zinc Media Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 5,750 in Zinc Media Group on November 28, 2024 and sell it today you would earn a total of 750.00 from holding Zinc Media Group or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Indutrade AB vs. Zinc Media Group
Performance |
| Timeline |
| Indutrade AB |
| Zinc Media Group |
Indutrade and Zinc Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Zinc Media
The main advantage of trading using opposite Indutrade and Zinc Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Zinc Media 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 Zinc Media will offset losses from the drop in Zinc Media's long position.| Indutrade vs. United Internet AG | Indutrade vs. Gamma Communications PLC | Indutrade vs. Ross Stores | Indutrade vs. Medical Properties Trust |
| Zinc Media vs. Dolly Varden Silver | Zinc Media vs. Spotify Technology SA | Zinc Media vs. Sunny Optical Technology | Zinc Media vs. SMA Solar Technology |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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