Correlation Between Zee Entertainment and Global Health

Can any of the company-specific risk be diversified away by investing in both Zee Entertainment and Global Health 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 Zee Entertainment and Global Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zee Entertainment Enterprises and Global Health Limited, you can compare the effects of market volatilities on Zee Entertainment and Global Health 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 Zee Entertainment with a short position of Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zee Entertainment and Global Health.

Diversification Opportunities for Zee Entertainment and Global Health

0.18

Correlation Coefficient

Zee Entertainment  Global Health

Average diversification

The 3 months correlation between Zee and Global is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Zee Entertainment Enterprises and Global Health Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Health Limited and Zee Entertainment 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 Zee Entertainment Enterprises are associated (or correlated) with Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health Limited has no effect on the direction of Zee Entertainment i.e., Zee Entertainment and Global Health go up and down completely randomly.

Pair Corralation between Zee Entertainment and Global Health

Assuming the 90 days trading horizon Zee Entertainment Enterprises is expected to under-perform the Global Health. In addition to that, Zee Entertainment is 1.25 times more volatile than Global Health Limited. It trades about -0.08 of its total potential returns per unit of risk. Global Health Limited is currently generating about -0.03 per unit of volatility. If you would invest  112,965  in Global Health Limited on August 31, 2024 and sell it today you would lose (5,330) from holding Global Health Limited or give up 4.72% of portfolio value over 90 days.

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

Zee Entertainment Enterprises  vs.  Global Health Limited

Zee Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zee Entertainment Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Global Health Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Health Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Global Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zee Entertainment and Global Health

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

The idea behind Zee Entertainment Enterprises and Global Health Limited 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.