Correlation Between SIB and ZCash
Can any of the company-specific risk be diversified away by investing in both SIB and ZCash 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 SIB and ZCash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIB and ZCash, you can compare the effects of market volatilities on SIB and ZCash 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 SIB with a short position of ZCash. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIB and ZCash.
Diversification Opportunities for SIB and ZCash
Good diversification
The 3 months correlation between SIB and ZCash is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SIB and ZCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZCash and SIB 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 SIB are associated (or correlated) with ZCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZCash has no effect on the direction of SIB i.e., SIB and ZCash go up and down completely randomly.
Pair Corralation between SIB and ZCash
If you would invest 0.97 in SIB on January 30, 2024 and sell it today you would earn a total of 0.00 from holding SIB or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 4.76% |
Values | Daily Returns |
SIB vs. ZCash
Performance |
Timeline |
SIB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ZCash |
SIB and ZCash Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SIB and ZCash
The main advantage of trading using opposite SIB and ZCash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIB position performs unexpectedly, ZCash 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 ZCash will offset losses from the drop in ZCash's long position.The idea behind SIB and ZCash 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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