Correlation Between ZINC MEDIA and Ichor Coal

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

By analyzing existing cross correlation between ZINC MEDIA GR and Ichor Coal NV, you can compare the effects of market volatilities on ZINC MEDIA and Ichor Coal 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 ZINC MEDIA with a short position of Ichor Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZINC MEDIA and Ichor Coal.

Diversification Opportunities for ZINC MEDIA and Ichor Coal

0.83

Correlation Coefficient

ZINC MEDIA  Ichor Coal

Very poor diversification

The 3 months correlation between ZINC and Ichor is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ZINC MEDIA GR and Ichor Coal NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Coal NV and ZINC MEDIA 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 ZINC MEDIA GR are associated (or correlated) with Ichor Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Coal NV has no effect on the direction of ZINC MEDIA i.e., ZINC MEDIA and Ichor Coal go up and down completely randomly.

Pair Corralation between ZINC MEDIA and Ichor Coal

If you would invest (100.00) in Ichor Coal NV on October 26, 2024 and sell it today you would earn a total of  100.00  from holding Ichor Coal NV or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	0.0%
Values	Daily Returns

ZINC MEDIA GR  vs.  Ichor Coal NV

ZINC MEDIA GR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZINC MEDIA GR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ichor Coal NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ichor Coal NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ichor Coal is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ZINC MEDIA and Ichor Coal

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

The idea behind ZINC MEDIA GR and Ichor Coal NV 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.