Correlation Between ZW Data and Sinclair Broadcast

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

By analyzing existing cross correlation between ZW Data Action and Sinclair Broadcast Group, you can compare the effects of market volatilities on ZW Data and Sinclair Broadcast 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 ZW Data with a short position of Sinclair Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZW Data and Sinclair Broadcast.

Diversification Opportunities for ZW Data and Sinclair Broadcast

-0.31

Correlation Coefficient

ZW Data  Sinclair Broadcast

Very good diversification

The 3 months correlation between CNET and Sinclair is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ZW Data Action and Sinclair Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair Broadcast and ZW Data 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 ZW Data Action are associated (or correlated) with Sinclair Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Broadcast has no effect on the direction of ZW Data i.e., ZW Data and Sinclair Broadcast go up and down completely randomly.

Pair Corralation between ZW Data and Sinclair Broadcast

Given the investment horizon of 90 days ZW Data Action is expected to generate 1.0 times more return on investment than Sinclair Broadcast. However, ZW Data Action is 1.0 times less risky than Sinclair Broadcast. It trades about 0.03 of its potential returns per unit of risk. Sinclair Broadcast Group is currently generating about -0.08 per unit of risk. If you would invest  97.00  in ZW Data Action on January 24, 2024 and sell it today you would earn a total of  2.00  from holding ZW Data Action or generate 2.06% return on investment over 90 days.

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

ZW Data Action  vs.  Sinclair Broadcast Group

ZW Data Action

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZW Data Action are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, ZW Data unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sinclair Broadcast

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinclair Broadcast Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with ZW Data and Sinclair Broadcast

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

The idea behind ZW Data Action and Sinclair Broadcast Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.