Correlation Between Zinc Media and United Internet
Can any of the company-specific risk be diversified away by investing in both Zinc Media and United Internet 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 United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zinc Media Group and United Internet AG, you can compare the effects of market volatilities on Zinc Media and United Internet 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 United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinc Media and United Internet.
Diversification Opportunities for Zinc Media and United Internet
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zinc and United is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Zinc Media Group and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG 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 Group are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Zinc Media i.e., Zinc Media and United Internet go up and down completely randomly.
Pair Corralation between Zinc Media and United Internet
Assuming the 90 days trading horizon Zinc Media Group is expected to generate 1.25 times more return on investment than United Internet. However, Zinc Media is 1.25 times more volatile than United Internet AG. It trades about -0.04 of its potential returns per unit of risk. United Internet AG is currently generating about -0.07 per unit of risk. If you would invest 6,950 in Zinc Media Group on November 2, 2024 and sell it today you would lose (850.00) from holding Zinc Media Group or give up 12.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zinc Media Group vs. United Internet AG
Performance |
| Timeline |
| Zinc Media Group |
| United Internet AG |
Zinc Media and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zinc Media and United Internet
The main advantage of trading using opposite Zinc Media and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zinc Media position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| Zinc Media vs. Cairo Communication SpA | Zinc Media vs. Gamma Communications PLC | Zinc Media vs. UNIQA Insurance Group | Zinc Media vs. Sydbank |
| United Internet vs. URU Metals | United Internet vs. Associated British Foods | United Internet vs. Golden Metal Resources | United Internet vs. Gear4music Plc |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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