Correlation Between Deutsche Post and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Zegona Communications 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 Deutsche Post and Zegona Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Post AG and Zegona Communications Plc, you can compare the effects of market volatilities on Deutsche Post and Zegona Communications 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 Deutsche Post with a short position of Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Zegona Communications.
Diversification Opportunities for Deutsche Post and Zegona Communications
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Zegona is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Zegona Communications Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zegona Communications Plc and Deutsche Post 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 Deutsche Post AG are associated (or correlated) with Zegona Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zegona Communications Plc has no effect on the direction of Deutsche Post i.e., Deutsche Post and Zegona Communications go up and down completely randomly.
Pair Corralation between Deutsche Post and Zegona Communications
Assuming the 90 days trading horizon Deutsche Post is expected to generate 4.52 times less return on investment than Zegona Communications. But when comparing it to its historical volatility, Deutsche Post AG is 3.55 times less risky than Zegona Communications. It trades about 0.2 of its potential returns per unit of risk. Zegona Communications Plc is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 31,600 in Zegona Communications Plc on October 21, 2024 and sell it today you would earn a total of 8,200 from holding Zegona Communications Plc or generate 25.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Post AG vs. Zegona Communications Plc
Performance |
| Timeline |
| Deutsche Post AG |
| Zegona Communications Plc |
Deutsche Post and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Zegona Communications
The main advantage of trading using opposite Deutsche Post and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Zegona Communications 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 Zegona Communications will offset losses from the drop in Zegona Communications' long position.| Deutsche Post vs. Raytheon Technologies Corp | Deutsche Post vs. Take Two Interactive Software | Deutsche Post vs. Dalata Hotel Group | Deutsche Post vs. Symphony Environmental Technologies |
| Zegona Communications vs. Associated British Foods | Zegona Communications vs. GreenX Metals | Zegona Communications vs. Aptitude Software Group | Zegona Communications vs. Europa Metals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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