Correlation Between Zinc Media and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Zinc Media and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Zinc Media and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinc Media and DFS Furniture.
Diversification Opportunities for Zinc Media and DFS Furniture
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zinc and DFS is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Zinc Media Group and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Zinc Media i.e., Zinc Media and DFS Furniture go up and down completely randomly.
Pair Corralation between Zinc Media and DFS Furniture
Assuming the 90 days trading horizon Zinc Media Group is expected to under-perform the DFS Furniture. In addition to that, Zinc Media is 1.21 times more volatile than DFS Furniture PLC. It trades about -0.06 of its total potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.06 per unit of volatility. If you would invest 11,070 in DFS Furniture PLC on October 14, 2024 and sell it today you would earn a total of 2,170 from holding DFS Furniture PLC or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zinc Media Group vs. DFS Furniture PLC
Performance |
| Timeline |
| Zinc Media Group |
| DFS Furniture PLC |
Zinc Media and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zinc Media and DFS Furniture
The main advantage of trading using opposite Zinc Media and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zinc Media position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Zinc Media vs. Compagnie Plastic Omnium | Zinc Media vs. Zurich Insurance Group | Zinc Media vs. JD Sports Fashion | Zinc Media vs. UNIQA Insurance Group |
| DFS Furniture vs. Ubisoft Entertainment | DFS Furniture vs. Zinc Media Group | DFS Furniture vs. Ross Stores | DFS Furniture vs. TBC Bank Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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