Correlation Between Catena Media and Zinc Media
Can any of the company-specific risk be diversified away by investing in both Catena Media and Zinc Media 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 Catena Media and Zinc Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media PLC and Zinc Media Group, you can compare the effects of market volatilities on Catena Media and Zinc Media 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 Catena Media with a short position of Zinc Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Zinc Media.
Diversification Opportunities for Catena Media and Zinc Media
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Catena and Zinc is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Zinc Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinc Media Group and Catena 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 Catena Media PLC are associated (or correlated) with Zinc Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinc Media Group has no effect on the direction of Catena Media i.e., Catena Media and Zinc Media go up and down completely randomly.
Pair Corralation between Catena Media and Zinc Media
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Zinc Media. In addition to that, Catena Media is 1.72 times more volatile than Zinc Media Group. It trades about -0.06 of its total potential returns per unit of risk. Zinc Media Group is currently generating about -0.04 per unit of volatility. If you would invest 8,750 in Zinc Media Group on September 6, 2024 and sell it today you would lose (3,600) from holding Zinc Media Group or give up 41.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.19% |
Values | Daily Returns |
Catena Media PLC vs. Zinc Media Group
Performance |
Timeline |
Catena Media PLC |
Zinc Media Group |
Catena Media and Zinc Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Catena Media and Zinc Media
The main advantage of trading using opposite Catena Media and Zinc Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Zinc Media 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 Zinc Media will offset losses from the drop in Zinc Media's long position.Catena Media vs. Hollywood Bowl Group | Catena Media vs. Summit Materials Cl | Catena Media vs. Cars Inc | Catena Media vs. One Media iP |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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