Correlation Between Zenith Steel and DJ Mediaprint

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

By analyzing existing cross correlation between Zenith Steel Pipes and DJ Mediaprint Logistics, you can compare the effects of market volatilities on Zenith Steel and DJ Mediaprint 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 Zenith Steel with a short position of DJ Mediaprint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zenith Steel and DJ Mediaprint.

Diversification Opportunities for Zenith Steel and DJ Mediaprint

-0.48

Correlation Coefficient

Zenith Steel  DJ Mediaprint

Very good diversification

The 3 months correlation between Zenith and DJML is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Zenith Steel Pipes and DJ Mediaprint Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DJ Mediaprint Logistics and Zenith Steel 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 Zenith Steel Pipes are associated (or correlated) with DJ Mediaprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DJ Mediaprint Logistics has no effect on the direction of Zenith Steel i.e., Zenith Steel and DJ Mediaprint go up and down completely randomly.

Pair Corralation between Zenith Steel and DJ Mediaprint

Assuming the 90 days trading horizon Zenith Steel Pipes is expected to generate 1.46 times more return on investment than DJ Mediaprint. However, Zenith Steel is 1.46 times more volatile than DJ Mediaprint Logistics. It trades about 0.13 of its potential returns per unit of risk. DJ Mediaprint Logistics is currently generating about -0.05 per unit of risk. If you would invest  689.00  in Zenith Steel Pipes on April 20, 2025 and sell it today you would earn a total of  211.00  from holding Zenith Steel Pipes or generate 30.62% return on investment over 90 days.

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

Zenith Steel Pipes  vs.  DJ Mediaprint Logistics

Zenith Steel Pipes

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zenith Steel Pipes are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zenith Steel unveiled solid returns over the last few months and may actually be approaching a breakup point.

DJ Mediaprint Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days DJ Mediaprint Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Zenith Steel and DJ Mediaprint

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

The idea behind Zenith Steel Pipes and DJ Mediaprint Logistics 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.