Correlation Between Corus Entertainment and ZoomerMedia

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

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

Diversification Opportunities for Corus Entertainment and ZoomerMedia

0.44

Correlation Coefficient

Corus Entertainment  ZoomerMedia

Very weak diversification

The 3 months correlation between Corus and ZoomerMedia is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Corus Entertainment and ZoomerMedia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZoomerMedia Limited and Corus Entertainment 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 Corus Entertainment are associated (or correlated) with ZoomerMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZoomerMedia Limited has no effect on the direction of Corus Entertainment i.e., Corus Entertainment and ZoomerMedia go up and down completely randomly.

Pair Corralation between Corus Entertainment and ZoomerMedia

If you would invest  0.30  in ZoomerMedia Limited on September 3, 2024 and sell it today you would earn a total of  4.70  from holding ZoomerMedia Limited or generate 1566.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Corus Entertainment  vs.  ZoomerMedia Limited

Corus Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corus Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Corus Entertainment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

ZoomerMedia Limited

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Corus Entertainment and ZoomerMedia

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

The idea behind Corus Entertainment and ZoomerMedia Limited 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.