Correlation Between Ziff Davis and ION Geophysical

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

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

Diversification Opportunities for Ziff Davis and ION Geophysical

-0.02

Correlation Coefficient

Ziff Davis  ION Geophysical

Good diversification

The 3 months correlation between Ziff and ION is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Ziff Davis and ION Geophysical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ION Geophysical and Ziff Davis 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 Ziff Davis are associated (or correlated) with ION Geophysical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ION Geophysical has no effect on the direction of Ziff Davis i.e., Ziff Davis and ION Geophysical go up and down completely randomly.

Pair Corralation between Ziff Davis and ION Geophysical

If you would invest  5,121  in Ziff Davis on February 26, 2024 and sell it today you would earn a total of  436.00  from holding Ziff Davis or generate 8.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Ziff Davis  vs.  ION Geophysical

Ziff Davis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ziff Davis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ION Geophysical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ziff Davis and ION Geophysical

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

The idea behind Ziff Davis and ION Geophysical 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..