Correlation Between Zinwell and Giant Manufacturing
Can any of the company-specific risk be diversified away by investing in both Zinwell and Giant Manufacturing 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 Zinwell and Giant Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zinwell and Giant Manufacturing Co, you can compare the effects of market volatilities on Zinwell and Giant Manufacturing 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 Zinwell with a short position of Giant Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinwell and Giant Manufacturing.
Diversification Opportunities for Zinwell and Giant Manufacturing
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zinwell and Giant is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Zinwell and Giant Manufacturing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giant Manufacturing and Zinwell 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 Zinwell are associated (or correlated) with Giant Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giant Manufacturing has no effect on the direction of Zinwell i.e., Zinwell and Giant Manufacturing go up and down completely randomly.
Pair Corralation between Zinwell and Giant Manufacturing
Assuming the 90 days trading horizon Zinwell is expected to generate 0.98 times more return on investment than Giant Manufacturing. However, Zinwell is 1.02 times less risky than Giant Manufacturing. It trades about -0.01 of its potential returns per unit of risk. Giant Manufacturing Co is currently generating about -0.04 per unit of risk. If you would invest 1,995 in Zinwell on August 26, 2024 and sell it today you would lose (325.00) from holding Zinwell or give up 16.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zinwell vs. Giant Manufacturing Co
Performance |
| Timeline |
| Zinwell |
| Giant Manufacturing |
Zinwell and Giant Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zinwell and Giant Manufacturing
The main advantage of trading using opposite Zinwell and Giant Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zinwell position performs unexpectedly, Giant Manufacturing 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 Giant Manufacturing will offset losses from the drop in Giant Manufacturing's long position.| Zinwell vs. Clevo Co | Zinwell vs. D Link Corp | Zinwell vs. Cheng Uei Precision | Zinwell vs. Senao International Co |
| Giant Manufacturing vs. Merida Industry Co | Giant Manufacturing vs. President Chain Store | Giant Manufacturing vs. Cheng Shin Rubber | Giant Manufacturing vs. Uni President Enterprises Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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