Correlation Between Zip Co and Imugene
Can any of the company-specific risk be diversified away by investing in both Zip Co and Imugene 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 Zip Co and Imugene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zip Co Limited and Imugene, you can compare the effects of market volatilities on Zip Co and Imugene 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 Zip Co with a short position of Imugene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zip Co and Imugene.
Diversification Opportunities for Zip Co and Imugene
Pay attention - limited upside
The 3 months correlation between Zip and Imugene is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Zip Co Limited and Imugene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imugene and Zip Co 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 Zip Co Limited are associated (or correlated) with Imugene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imugene has no effect on the direction of Zip Co i.e., Zip Co and Imugene go up and down completely randomly.
Pair Corralation between Zip Co and Imugene
Assuming the 90 days trading horizon Zip Co Limited is expected to generate 0.87 times more return on investment than Imugene. However, Zip Co Limited is 1.15 times less risky than Imugene. It trades about 0.2 of its potential returns per unit of risk. Imugene is currently generating about -0.16 per unit of risk. If you would invest 279.00 in Zip Co Limited on August 29, 2024 and sell it today you would earn a total of 47.00 from holding Zip Co Limited or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zip Co Limited vs. Imugene
Performance |
| Timeline |
| Zip Co Limited |
| Imugene |
Zip Co and Imugene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zip Co and Imugene
The main advantage of trading using opposite Zip Co and Imugene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zip Co position performs unexpectedly, Imugene 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 Imugene will offset losses from the drop in Imugene's long position.| Zip Co vs. Hotel Property Investments | Zip Co vs. Bailador Technology Invest | Zip Co vs. Ras Technology Holdings | Zip Co vs. Diversified United Investment |
| Imugene vs. Westpac Banking | Imugene vs. Hutchison Telecommunications | Imugene vs. Kkr Credit Income | Imugene vs. Autosports 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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