Correlation Between Zinc Media and J Sainsbury

Can any of the company-specific risk be diversified away by investing in both Zinc Media and J Sainsbury 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 J Sainsbury 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 J Sainsbury PLC, you can compare the effects of market volatilities on Zinc Media and J Sainsbury 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 J Sainsbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinc Media and J Sainsbury.

Diversification Opportunities for Zinc Media and J Sainsbury

0.55

Correlation Coefficient

Zinc Media  J Sainsbury

Very weak diversification

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

Pair Corralation between Zinc Media and J Sainsbury

Assuming the 90 days trading horizon Zinc Media Group is expected to under-perform the J Sainsbury. In addition to that, Zinc Media is 1.82 times more volatile than J Sainsbury PLC. It trades about -0.16 of its total potential returns per unit of risk. J Sainsbury PLC is currently generating about -0.05 per unit of volatility. If you would invest  29,106  in J Sainsbury PLC on September 12, 2024 and sell it today you would lose (1,646) from holding J Sainsbury PLC or give up 5.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Zinc Media Group  vs.  J Sainsbury PLC

Zinc Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zinc Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental 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.

J Sainsbury PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zinc Media and J Sainsbury

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

The idea behind Zinc Media Group and J Sainsbury PLC 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.