Correlation Between Zinwell and Capital Ice

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

By analyzing existing cross correlation between Zinwell and Capital Ice 7, you can compare the effects of market volatilities on Zinwell and Capital Ice 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 Zinwell with a short position of Capital Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zinwell and Capital Ice.

Diversification Opportunities for Zinwell and Capital Ice

-0.73

Correlation Coefficient

Zinwell  Capital Ice

Pay attention - limited upside

The 3 months correlation between Zinwell and Capital is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Zinwell and Capital Ice 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Ice 7 and Zinwell 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 Zinwell are associated (or correlated) with Capital Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Ice 7 has no effect on the direction of Zinwell i.e., Zinwell and Capital Ice go up and down completely randomly.

Pair Corralation between Zinwell and Capital Ice

Assuming the 90 days trading horizon Zinwell is expected to generate 3.54 times more return on investment than Capital Ice. However, Zinwell is 3.54 times more volatile than Capital Ice 7. It trades about 0.03 of its potential returns per unit of risk. Capital Ice 7 is currently generating about 0.02 per unit of risk. If you would invest  1,495  in Zinwell on December 2, 2024 and sell it today you would earn a total of  15.00  from holding Zinwell or generate 1.0% return on investment over 90 days.

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

Zinwell  vs.  Capital Ice 7

Zinwell

Risk-Adjusted Performance

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.

Capital Ice 7

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Ice 7 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Capital Ice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zinwell and Capital Ice

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

The idea behind Zinwell and Capital Ice 7 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 Stocks Directory module to find actively traded stocks across global markets.