Correlation Between Zinc Media and Catena Media
Can any of the company-specific risk be diversified away by investing in both Zinc Media and Catena 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 Zinc Media and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zinc Media Group and Catena Media PLC, you can compare the effects of market volatilities on Zinc Media and Catena 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 Zinc Media with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinc Media and Catena Media.
Diversification Opportunities for Zinc Media and Catena Media
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zinc and Catena is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Zinc Media Group and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC 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 Group are associated (or correlated) with Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of Zinc Media i.e., Zinc Media and Catena Media go up and down completely randomly.
Pair Corralation between Zinc Media and Catena Media
Assuming the 90 days trading horizon Zinc Media Group is expected to under-perform the Catena Media. But the stock apears to be less risky and, when comparing its historical volatility, Zinc Media Group is 1.72 times less risky than Catena Media. The stock trades about -0.14 of its potential returns per unit of risk. The Catena Media PLC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 569.00 in Catena Media PLC on September 5, 2024 and sell it today you would lose (155.00) from holding Catena Media PLC or give up 27.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Zinc Media Group vs. Catena Media PLC
Performance |
Timeline |
Zinc Media Group |
Catena Media PLC |
Zinc Media and Catena Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zinc Media and Catena Media
The main advantage of trading using opposite Zinc Media and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zinc Media position performs unexpectedly, Catena 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 Catena Media will offset losses from the drop in Catena Media's long position.Zinc Media vs. Samsung Electronics Co | Zinc Media vs. Samsung Electronics Co | Zinc Media vs. Hyundai Motor | Zinc Media vs. Toyota Motor Corp |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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