Correlation Between ZINC MEDIA and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both ZINC MEDIA and Stanley Electric 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 Stanley Electric 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 Stanley Electric Co, you can compare the effects of market volatilities on ZINC MEDIA and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZINC MEDIA and Stanley Electric.
Diversification Opportunities for ZINC MEDIA and Stanley Electric
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZINC and Stanley is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ZINC MEDIA GR and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of ZINC MEDIA i.e., ZINC MEDIA and Stanley Electric go up and down completely randomly.
Pair Corralation between ZINC MEDIA and Stanley Electric
Assuming the 90 days trading horizon ZINC MEDIA GR is expected to under-perform the Stanley Electric. In addition to that, ZINC MEDIA is 2.52 times more volatile than Stanley Electric Co. It trades about -0.23 of its total potential returns per unit of risk. Stanley Electric Co is currently generating about -0.04 per unit of volatility. If you would invest 1,550 in Stanley Electric Co on September 19, 2024 and sell it today you would lose (20.00) from holding Stanley Electric Co or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZINC MEDIA GR vs. Stanley Electric Co
Performance |
| Timeline |
| ZINC MEDIA GR |
| Stanley Electric |
ZINC MEDIA and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZINC MEDIA and Stanley Electric
The main advantage of trading using opposite ZINC MEDIA and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZINC MEDIA position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.The idea behind ZINC MEDIA GR and Stanley Electric Co 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.| Stanley Electric vs. ZINC MEDIA GR | Stanley Electric vs. Southwest Airlines Co | Stanley Electric vs. LG Display Co | Stanley Electric vs. Tencent Music Entertainment |
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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