Correlation Between AMG Advanced and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both AMG Advanced 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 AMG Advanced and Zegona Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Zegona Communications Plc, you can compare the effects of market volatilities on AMG Advanced 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 AMG Advanced with a short position of Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Zegona Communications.
Diversification Opportunities for AMG Advanced and Zegona Communications
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMG and Zegona is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical 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 AMG Advanced 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 AMG Advanced Metallurgical 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 AMG Advanced i.e., AMG Advanced and Zegona Communications go up and down completely randomly.
Pair Corralation between AMG Advanced and Zegona Communications
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Zegona Communications. But the stock apears to be less risky and, when comparing its historical volatility, AMG Advanced Metallurgical is 1.18 times less risky than Zegona Communications. The stock trades about -0.05 of its potential returns per unit of risk. The Zegona Communications Plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 14,900 in Zegona Communications Plc on September 14, 2024 and sell it today you would earn a total of 17,100 from holding Zegona Communications Plc or generate 114.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Zegona Communications Plc
Performance |
| Timeline |
| AMG Advanced Metallu |
| Zegona Communications Plc |
AMG Advanced and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Zegona Communications
The main advantage of trading using opposite AMG Advanced and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced 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.| AMG Advanced vs. Induction Healthcare Group | AMG Advanced vs. Zoom Video Communications | AMG Advanced vs. MyHealthChecked Plc | AMG Advanced vs. United Internet AG |
| Zegona Communications vs. Vulcan Materials Co | Zegona Communications vs. Cairo Communication SpA | Zegona Communications vs. Orient Telecoms | Zegona Communications vs. Morgan Advanced Materials |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |