Correlation Between AiMedia Technologies and Zenith Minerals

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

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

Diversification Opportunities for AiMedia Technologies and Zenith Minerals

-0.16

Correlation Coefficient

AiMedia Technologies  Zenith Minerals

Good diversification

The 3 months correlation between AiMedia and Zenith is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies and Zenith Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zenith Minerals and AiMedia Technologies 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 AiMedia Technologies are associated (or correlated) with Zenith Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zenith Minerals has no effect on the direction of AiMedia Technologies i.e., AiMedia Technologies and Zenith Minerals go up and down completely randomly.

Pair Corralation between AiMedia Technologies and Zenith Minerals

Assuming the 90 days trading horizon AiMedia Technologies is expected to under-perform the Zenith Minerals. But the stock apears to be less risky and, when comparing its historical volatility, AiMedia Technologies is 1.1 times less risky than Zenith Minerals. The stock trades about -0.03 of its potential returns per unit of risk. The Zenith Minerals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4.10  in Zenith Minerals on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Zenith Minerals or generate 24.39% return on investment over 90 days.

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

AiMedia Technologies  vs.  Zenith Minerals

AiMedia Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days AiMedia Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Zenith Minerals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zenith Minerals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Zenith Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AiMedia Technologies and Zenith Minerals

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

The idea behind AiMedia Technologies and Zenith Minerals 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.