Correlation Between ZINC MEDIA and AUSNUTRIA DAIRY

Can any of the company-specific risk be diversified away by investing in both ZINC MEDIA and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZINC MEDIA GR and AUSNUTRIA DAIRY, you can compare the effects of market volatilities on ZINC MEDIA and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZINC MEDIA and AUSNUTRIA DAIRY.

Diversification Opportunities for ZINC MEDIA and AUSNUTRIA DAIRY

0.55

Correlation Coefficient

ZINC MEDIA  AUSNUTRIA DAIRY

Very weak diversification

The 3 months correlation between ZINC and AUSNUTRIA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ZINC MEDIA GR and AUSNUTRIA DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSNUTRIA DAIRY 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 GR are associated (or correlated) with AUSNUTRIA DAIRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSNUTRIA DAIRY has no effect on the direction of ZINC MEDIA i.e., ZINC MEDIA and AUSNUTRIA DAIRY go up and down completely randomly.

Pair Corralation between ZINC MEDIA and AUSNUTRIA DAIRY

Assuming the 90 days trading horizon ZINC MEDIA GR is expected to under-perform the AUSNUTRIA DAIRY. In addition to that, ZINC MEDIA is 1.09 times more volatile than AUSNUTRIA DAIRY. It trades about -0.03 of its total potential returns per unit of risk. AUSNUTRIA DAIRY is currently generating about -0.03 per unit of volatility. If you would invest  35.00  in AUSNUTRIA DAIRY on September 28, 2024 and sell it today you would lose (13.00) from holding AUSNUTRIA DAIRY or give up 37.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ZINC MEDIA GR  vs.  AUSNUTRIA DAIRY

ZINC MEDIA GR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZINC MEDIA GR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AUSNUTRIA DAIRY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AUSNUTRIA DAIRY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, AUSNUTRIA DAIRY is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ZINC MEDIA and AUSNUTRIA DAIRY

The main advantage of trading using opposite ZINC MEDIA and AUSNUTRIA DAIRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZINC MEDIA position performs unexpectedly, AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY will offset losses from the drop in AUSNUTRIA DAIRY's long position.

The idea behind ZINC MEDIA GR and AUSNUTRIA DAIRY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.