Correlation Between Zinc Media and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Zinc Media and SBM Offshore 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 SBM Offshore 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 SBM Offshore NV, you can compare the effects of market volatilities on Zinc Media and SBM Offshore 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 SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinc Media and SBM Offshore.
Diversification Opportunities for Zinc Media and SBM Offshore
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zinc and SBM is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Zinc Media Group and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV 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 SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of Zinc Media i.e., Zinc Media and SBM Offshore go up and down completely randomly.
Pair Corralation between Zinc Media and SBM Offshore
Assuming the 90 days trading horizon Zinc Media Group is expected to under-perform the SBM Offshore. In addition to that, Zinc Media is 1.36 times more volatile than SBM Offshore NV. It trades about -0.04 of its total potential returns per unit of risk. SBM Offshore NV is currently generating about 0.04 per unit of volatility. If you would invest 1,316 in SBM Offshore NV on September 2, 2024 and sell it today you would earn a total of 399.00 from holding SBM Offshore NV or generate 30.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.59% |
| Values | Daily Returns |
Zinc Media Group vs. SBM Offshore NV
Performance |
| Timeline |
| Zinc Media Group |
| SBM Offshore NV |
Zinc Media and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zinc Media and SBM Offshore
The main advantage of trading using opposite Zinc Media and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zinc Media position performs unexpectedly, SBM Offshore 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 SBM Offshore will offset losses from the drop in SBM Offshore's long position.| Zinc Media vs. Samsung Electronics Co | Zinc Media vs. Samsung Electronics Co | Zinc Media vs. Hyundai Motor | Zinc Media vs. Toyota Motor Corp |
| SBM Offshore vs. Zoom Video Communications | SBM Offshore vs. Enbridge | SBM Offshore vs. Endo International PLC | SBM Offshore vs. Diversified Energy |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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