Correlation Between ZINC MEDIA and SAFETY MEDICAL

Can any of the company-specific risk be diversified away by investing in both ZINC MEDIA and SAFETY MEDICAL 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 SAFETY MEDICAL 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 SAFETY MEDICAL PROD, you can compare the effects of market volatilities on ZINC MEDIA and SAFETY MEDICAL 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 SAFETY MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZINC MEDIA and SAFETY MEDICAL.

Diversification Opportunities for ZINC MEDIA and SAFETY MEDICAL

0.85

Correlation Coefficient

ZINC MEDIA  SAFETY MEDICAL

Very poor diversification

The 3 months correlation between ZINC and SAFETY is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding ZINC MEDIA GR and SAFETY MEDICAL PROD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAFETY MEDICAL PROD 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 SAFETY MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAFETY MEDICAL PROD has no effect on the direction of ZINC MEDIA i.e., ZINC MEDIA and SAFETY MEDICAL go up and down completely randomly.

Pair Corralation between ZINC MEDIA and SAFETY MEDICAL

Assuming the 90 days trading horizon ZINC MEDIA GR is expected to generate 0.99 times more return on investment than SAFETY MEDICAL. However, ZINC MEDIA GR is 1.01 times less risky than SAFETY MEDICAL. It trades about -0.14 of its potential returns per unit of risk. SAFETY MEDICAL PROD is currently generating about -0.26 per unit of risk. If you would invest  75.00  in ZINC MEDIA GR on September 15, 2024 and sell it today you would lose (19.00) from holding ZINC MEDIA GR or give up 25.33% of portfolio value over 90 days.

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

ZINC MEDIA GR  vs.  SAFETY MEDICAL PROD

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 weak 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.

SAFETY MEDICAL PROD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAFETY MEDICAL PROD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ZINC MEDIA and SAFETY MEDICAL

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

The idea behind ZINC MEDIA GR and SAFETY MEDICAL PROD 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.