Correlation Between ZINC MEDIA and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both ZINC MEDIA and APPLIED MATERIALS 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 ZINC MEDIA and APPLIED MATERIALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZINC MEDIA GR and APPLIED MATERIALS, you can compare the effects of market volatilities on ZINC MEDIA and APPLIED MATERIALS 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 ZINC MEDIA with a short position of APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZINC MEDIA and APPLIED MATERIALS.
Diversification Opportunities for ZINC MEDIA and APPLIED MATERIALS
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ZINC and APPLIED is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ZINC MEDIA GR and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS and ZINC MEDIA 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 ZINC MEDIA GR are associated (or correlated) with APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of ZINC MEDIA i.e., ZINC MEDIA and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between ZINC MEDIA and APPLIED MATERIALS
Assuming the 90 days trading horizon ZINC MEDIA GR is expected to under-perform the APPLIED MATERIALS. But the stock apears to be less risky and, when comparing its historical volatility, ZINC MEDIA GR is 1.31 times less risky than APPLIED MATERIALS. The stock trades about -0.08 of its potential returns per unit of risk. The APPLIED MATERIALS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,908 in APPLIED MATERIALS on September 1, 2024 and sell it today you would earn a total of 3,624 from holding APPLIED MATERIALS or generate 28.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZINC MEDIA GR vs. APPLIED MATERIALS
Performance |
| Timeline |
| ZINC MEDIA GR |
| APPLIED MATERIALS |
ZINC MEDIA and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZINC MEDIA and APPLIED MATERIALS
The main advantage of trading using opposite ZINC MEDIA and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZINC MEDIA position performs unexpectedly, APPLIED MATERIALS 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| ZINC MEDIA vs. Playtech plc | ZINC MEDIA vs. Micron Technology | ZINC MEDIA vs. Align Technology | ZINC MEDIA vs. Wayside Technology Group |
| APPLIED MATERIALS vs. QBE Insurance Group | APPLIED MATERIALS vs. Selective Insurance Group | APPLIED MATERIALS vs. Singapore Reinsurance | APPLIED MATERIALS vs. United Natural Foods |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |