Correlation Between Carnival Industrial and Zinwell
Can any of the company-specific risk be diversified away by investing in both Carnival Industrial and Zinwell 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 Carnival Industrial and Zinwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carnival Industrial Corp and Zinwell, you can compare the effects of market volatilities on Carnival Industrial and Zinwell 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 Carnival Industrial with a short position of Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival Industrial and Zinwell.
Diversification Opportunities for Carnival Industrial and Zinwell
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Carnival and Zinwell is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Carnival Industrial Corp and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell and Carnival Industrial 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 Carnival Industrial Corp are associated (or correlated) with Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Carnival Industrial i.e., Carnival Industrial and Zinwell go up and down completely randomly.
Pair Corralation between Carnival Industrial and Zinwell
Assuming the 90 days trading horizon Carnival Industrial Corp is expected to generate 0.35 times more return on investment than Zinwell. However, Carnival Industrial Corp is 2.88 times less risky than Zinwell. It trades about -0.05 of its potential returns per unit of risk. Zinwell is currently generating about -0.11 per unit of risk. If you would invest 1,000.00 in Carnival Industrial Corp on September 1, 2024 and sell it today you would lose (7.00) from holding Carnival Industrial Corp or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carnival Industrial Corp vs. Zinwell
Performance |
| Timeline |
| Carnival Industrial Corp |
| Zinwell |
Carnival Industrial and Zinwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carnival Industrial and Zinwell
The main advantage of trading using opposite Carnival Industrial and Zinwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival Industrial position performs unexpectedly, Zinwell 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 Zinwell will offset losses from the drop in Zinwell's long position.| Carnival Industrial vs. Chaintech Technology Corp | Carnival Industrial vs. AVerMedia Technologies | Carnival Industrial vs. Avision | Carnival Industrial vs. Clevo Co |
| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao International Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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