Correlation Between Zinc Media and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Zinc Media and Ebro Foods 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 Ebro Foods 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 Ebro Foods, you can compare the effects of market volatilities on Zinc Media and Ebro Foods 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 Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinc Media and Ebro Foods.
Diversification Opportunities for Zinc Media and Ebro Foods
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zinc and Ebro is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Zinc Media Group and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods 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 Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods has no effect on the direction of Zinc Media i.e., Zinc Media and Ebro Foods go up and down completely randomly.
Pair Corralation between Zinc Media and Ebro Foods
Assuming the 90 days trading horizon Zinc Media Group is expected to generate 3.48 times more return on investment than Ebro Foods. However, Zinc Media is 3.48 times more volatile than Ebro Foods. It trades about 0.35 of its potential returns per unit of risk. Ebro Foods is currently generating about 0.01 per unit of risk. If you would invest 4,860 in Zinc Media Group on October 10, 2024 and sell it today you would earn a total of 790.00 from holding Zinc Media Group or generate 16.26% 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 Group vs. Ebro Foods
Performance |
| Timeline |
| Zinc Media Group |
| Ebro Foods |
Zinc Media and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zinc Media and Ebro Foods
The main advantage of trading using opposite Zinc Media and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zinc Media position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| Zinc Media vs. Heavitree Brewery | Zinc Media vs. Ecclesiastical Insurance Office | Zinc Media vs. Qurate Retail Series | Zinc Media vs. Samsung Electronics Co |
| Ebro Foods vs. Air Products Chemicals | Ebro Foods vs. McEwen Mining | Ebro Foods vs. European Metals Holdings | Ebro Foods vs. Hochschild Mining 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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