Correlation Between ZINC MEDIA and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both ZINC MEDIA and Choice Hotels 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 Choice Hotels 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 Choice Hotels International, you can compare the effects of market volatilities on ZINC MEDIA and Choice Hotels 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 Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZINC MEDIA and Choice Hotels.
Diversification Opportunities for ZINC MEDIA and Choice Hotels
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZINC and Choice is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ZINC MEDIA GR and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern 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 Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of ZINC MEDIA i.e., ZINC MEDIA and Choice Hotels go up and down completely randomly.
Pair Corralation between ZINC MEDIA and Choice Hotels
Assuming the 90 days trading horizon ZINC MEDIA GR is expected to generate 1.25 times more return on investment than Choice Hotels. However, ZINC MEDIA is 1.25 times more volatile than Choice Hotels International. It trades about 0.35 of its potential returns per unit of risk. Choice Hotels International is currently generating about 0.13 per unit of risk. If you would invest 63.00 in ZINC MEDIA GR on November 28, 2024 and sell it today you would earn a total of 10.00 from holding ZINC MEDIA GR or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZINC MEDIA GR vs. Choice Hotels International
Performance |
| Timeline |
| ZINC MEDIA GR |
| Choice Hotels Intern |
ZINC MEDIA and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZINC MEDIA and Choice Hotels
The main advantage of trading using opposite ZINC MEDIA and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZINC MEDIA position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| ZINC MEDIA vs. Apollo Investment Corp | ZINC MEDIA vs. CDL INVESTMENT | ZINC MEDIA vs. New Residential Investment | ZINC MEDIA vs. Perseus Mining Limited |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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