Correlation Between Markor International and Zoy Home
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By analyzing existing cross correlation between Markor International Home and Zoy Home Furnishing, you can compare the effects of market volatilities on Markor International and Zoy Home 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 Markor International with a short position of Zoy Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markor International and Zoy Home.
Diversification Opportunities for Markor International and Zoy Home
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Markor and Zoy is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Markor International Home and Zoy Home Furnishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoy Home Furnishing and Markor International 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 Markor International Home are associated (or correlated) with Zoy Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoy Home Furnishing has no effect on the direction of Markor International i.e., Markor International and Zoy Home go up and down completely randomly.
Pair Corralation between Markor International and Zoy Home
Assuming the 90 days trading horizon Markor International Home is expected to under-perform the Zoy Home. But the stock apears to be less risky and, when comparing its historical volatility, Markor International Home is 1.1 times less risky than Zoy Home. The stock trades about -0.29 of its potential returns per unit of risk. The Zoy Home Furnishing is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,090 in Zoy Home Furnishing on October 28, 2024 and sell it today you would earn a total of 36.00 from holding Zoy Home Furnishing or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Markor International Home vs. Zoy Home Furnishing
Performance |
| Timeline |
| Markor International Home |
| Zoy Home Furnishing |
Markor International and Zoy Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Markor International and Zoy Home
The main advantage of trading using opposite Markor International and Zoy Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markor International position performs unexpectedly, Zoy Home 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 Zoy Home will offset losses from the drop in Zoy Home's long position.The idea behind Markor International Home and Zoy Home Furnishing 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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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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