Correlation Between Vienna Insurance and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance 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 Vienna Insurance and Zegona Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vienna Insurance Group and Zegona Communications Plc, you can compare the effects of market volatilities on Vienna Insurance 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 Vienna Insurance with a short position of Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Zegona Communications.
Diversification Opportunities for Vienna Insurance and Zegona Communications
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vienna and Zegona is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group 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 Vienna Insurance 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 Vienna Insurance Group 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 Vienna Insurance i.e., Vienna Insurance and Zegona Communications go up and down completely randomly.
Pair Corralation between Vienna Insurance and Zegona Communications
Assuming the 90 days trading horizon Vienna Insurance is expected to generate 1.17 times less return on investment than Zegona Communications. But when comparing it to its historical volatility, Vienna Insurance Group is 2.98 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 0.08 of returns per unit of risk over similar time horizon. If you would invest 30,800 in Zegona Communications Plc on September 13, 2024 and sell it today you would earn a total of 1,200 from holding Zegona Communications Plc or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vienna Insurance Group vs. Zegona Communications Plc
Performance |
| Timeline |
| Vienna Insurance |
| Zegona Communications Plc |
Vienna Insurance and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vienna Insurance and Zegona Communications
The main advantage of trading using opposite Vienna Insurance and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance 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.| Vienna Insurance vs. European Metals Holdings | Vienna Insurance vs. Odfjell Drilling | Vienna Insurance vs. Aeorema Communications Plc | Vienna Insurance vs. Silvercorp Metals |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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