Correlation Between Global Net and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and Zegona Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Zegona Communications Plc, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Zegona Communications.
Diversification Opportunities for Global Net and Zegona Communications
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Zegona is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease 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 Global Net 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 Global Net Lease 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 Global Net i.e., Global Net and Zegona Communications go up and down completely randomly.
Pair Corralation between Global Net and Zegona Communications
Assuming the 90 days trading horizon Global Net is expected to generate 1.44 times less return on investment than Zegona Communications. But when comparing it to its historical volatility, Global Net Lease is 1.21 times less risky than Zegona Communications. It trades about 0.07 of its potential returns per unit of risk. Zegona Communications Plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 42,400 in Zegona Communications Plc on November 2, 2024 and sell it today you would earn a total of 1,400 from holding Zegona Communications Plc or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. Zegona Communications Plc
Performance |
| Timeline |
| Global Net Lease |
| Zegona Communications Plc |
Global Net and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Zegona Communications
The main advantage of trading using opposite Global Net and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.| Global Net vs. Advanced Medical Solutions | Global Net vs. Europa Metals | Global Net vs. Ondine Biomedical | Global Net vs. GoldMining |
| Zegona Communications vs. Zoom Video Communications | Zegona Communications vs. Charter Communications Cl | Zegona Communications vs. Spirent Communications plc | Zegona Communications vs. Melia Hotels |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |