Correlation Between Clevo and Zinwell

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

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

Diversification Opportunities for Clevo and Zinwell

0.59

Correlation Coefficient

Clevo  Zinwell

Very weak diversification

The 3 months correlation between Clevo and Zinwell is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Clevo Co and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell and Clevo 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 Clevo Co are associated (or correlated) with Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Clevo i.e., Clevo and Zinwell go up and down completely randomly.

Pair Corralation between Clevo and Zinwell

Assuming the 90 days trading horizon Clevo Co is expected to generate 1.87 times more return on investment than Zinwell. However, Clevo is 1.87 times more volatile than Zinwell. It trades about 0.02 of its potential returns per unit of risk. Zinwell is currently generating about -0.08 per unit of risk. If you would invest  5,500  in Clevo Co on September 13, 2024 and sell it today you would earn a total of  60.00  from holding Clevo Co or generate 1.09% return on investment over 90 days.

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

Clevo Co  vs.  Zinwell

Clevo

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clevo Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Clevo is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Zinwell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zinwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Clevo and Zinwell

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

The idea behind Clevo Co and Zinwell 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.