Correlation Between United Utilities and Zanaga Iron
Can any of the company-specific risk be diversified away by investing in both United Utilities and Zanaga Iron 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 United Utilities and Zanaga Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Utilities Group and Zanaga Iron Ore, you can compare the effects of market volatilities on United Utilities and Zanaga Iron 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 United Utilities with a short position of Zanaga Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and Zanaga Iron.
Diversification Opportunities for United Utilities and Zanaga Iron
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Zanaga is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and Zanaga Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zanaga Iron Ore and United Utilities 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 United Utilities Group are associated (or correlated) with Zanaga Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zanaga Iron Ore has no effect on the direction of United Utilities i.e., United Utilities and Zanaga Iron go up and down completely randomly.
Pair Corralation between United Utilities and Zanaga Iron
Assuming the 90 days trading horizon United Utilities is expected to generate 4.51 times less return on investment than Zanaga Iron. But when comparing it to its historical volatility, United Utilities Group is 4.98 times less risky than Zanaga Iron. It trades about 0.03 of its potential returns per unit of risk. Zanaga Iron Ore is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 491.00 in Zanaga Iron Ore on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Zanaga Iron Ore or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Utilities Group vs. Zanaga Iron Ore
Performance |
| Timeline |
| United Utilities |
| Zanaga Iron Ore |
United Utilities and Zanaga Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and Zanaga Iron
The main advantage of trading using opposite United Utilities and Zanaga Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities position performs unexpectedly, Zanaga Iron 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 Zanaga Iron will offset losses from the drop in Zanaga Iron's long position.| United Utilities vs. Herald Investment Trust | United Utilities vs. CVS Health Corp | United Utilities vs. Aurora Investment Trust | United Utilities vs. Inspiration Healthcare Group |
| Zanaga Iron vs. Ion Beam Applications | Zanaga Iron vs. United Utilities Group | Zanaga Iron vs. Roadside Real Estate | Zanaga Iron vs. Vitec Software Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |