Correlation Between LOral SA and ZINZINO AB
Can any of the company-specific risk be diversified away by investing in both LOral SA and ZINZINO AB 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 LOral SA and ZINZINO AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOral SA and ZINZINO AB B, you can compare the effects of market volatilities on LOral SA and ZINZINO AB 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 LOral SA with a short position of ZINZINO AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOral SA and ZINZINO AB.
Diversification Opportunities for LOral SA and ZINZINO AB
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LOral and ZINZINO is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LOral SA and ZINZINO AB B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINZINO AB B and LOral SA 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 LOral SA are associated (or correlated) with ZINZINO AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINZINO AB B has no effect on the direction of LOral SA i.e., LOral SA and ZINZINO AB go up and down completely randomly.
Pair Corralation between LOral SA and ZINZINO AB
Assuming the 90 days horizon LOral SA is expected to under-perform the ZINZINO AB. But the stock apears to be less risky and, when comparing its historical volatility, LOral SA is 2.04 times less risky than ZINZINO AB. The stock trades about -0.06 of its potential returns per unit of risk. The ZINZINO AB B is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 766.00 in ZINZINO AB B on November 1, 2024 and sell it today you would earn a total of 157.00 from holding ZINZINO AB B or generate 20.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LOral SA vs. ZINZINO AB B
Performance |
| Timeline |
| LOral SA |
| ZINZINO AB B |
LOral SA and ZINZINO AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOral SA and ZINZINO AB
The main advantage of trading using opposite LOral SA and ZINZINO AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOral SA position performs unexpectedly, ZINZINO AB 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 ZINZINO AB will offset losses from the drop in ZINZINO AB's long position.| LOral SA vs. Colgate Palmolive | LOral SA vs. Superior Plus Corp | LOral SA vs. Origin Agritech | LOral SA vs. Identiv |
| ZINZINO AB vs. LOral SA | ZINZINO AB vs. Colgate Palmolive | ZINZINO AB vs. Superior Plus Corp | ZINZINO AB vs. Origin Agritech |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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