Correlation Between Zinus and Celltrion

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

By analyzing existing cross correlation between Zinus Inc and Celltrion, you can compare the effects of market volatilities on Zinus and Celltrion 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 Zinus with a short position of Celltrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinus and Celltrion.

Diversification Opportunities for Zinus and Celltrion

-0.53

Correlation Coefficient

Zinus  Celltrion

Excellent diversification

The 3 months correlation between Zinus and Celltrion is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Zinus Inc and Celltrion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celltrion and Zinus 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 Zinus Inc are associated (or correlated) with Celltrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celltrion has no effect on the direction of Zinus i.e., Zinus and Celltrion go up and down completely randomly.

Pair Corralation between Zinus and Celltrion

Assuming the 90 days trading horizon Zinus is expected to generate 36.41 times less return on investment than Celltrion. In addition to that, Zinus is 1.32 times more volatile than Celltrion. It trades about 0.0 of its total potential returns per unit of risk. Celltrion is currently generating about 0.03 per unit of volatility. If you would invest  16,256,800  in Celltrion on September 26, 2024 and sell it today you would earn a total of  3,183,200  from holding Celltrion or generate 19.58% return on investment over 90 days.

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

Zinus Inc  vs.  Celltrion

Zinus Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zinus Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zinus sustained solid returns over the last few months and may actually be approaching a breakup point.

Celltrion

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zinus and Celltrion

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

The idea behind Zinus Inc and Celltrion 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.