Correlation Between AJ Bell and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both AJ Bell 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 AJ Bell and Zegona Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJ Bell plc and Zegona Communications Plc, you can compare the effects of market volatilities on AJ Bell 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 AJ Bell with a short position of Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJ Bell and Zegona Communications.
Diversification Opportunities for AJ Bell and Zegona Communications
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between AJB and Zegona is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding AJ Bell plc 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 AJ Bell 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 AJ Bell plc 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 AJ Bell i.e., AJ Bell and Zegona Communications go up and down completely randomly.
Pair Corralation between AJ Bell and Zegona Communications
Assuming the 90 days trading horizon AJ Bell is expected to generate 8.66 times less return on investment than Zegona Communications. But when comparing it to its historical volatility, AJ Bell plc is 8.18 times less risky than Zegona Communications. It trades about 0.04 of its potential returns per unit of risk. Zegona Communications Plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,950 in Zegona Communications Plc on September 12, 2024 and sell it today you would earn a total of 25,050 from holding Zegona Communications Plc or generate 315.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.76% |
| Values | Daily Returns |
AJ Bell plc vs. Zegona Communications Plc
Performance |
| Timeline |
| AJ Bell plc |
| Zegona Communications Plc |
AJ Bell and Zegona Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJ Bell and Zegona Communications
The main advantage of trading using opposite AJ Bell and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJ Bell 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.| AJ Bell vs. BioNTech SE | AJ Bell vs. Raytheon Technologies Corp | AJ Bell vs. Concurrent Technologies Plc | AJ Bell vs. Roper Technologies |
| Zegona Communications vs. Catalyst Media Group | Zegona Communications vs. CATLIN GROUP | Zegona Communications vs. Tamburi Investment Partners | Zegona Communications vs. Magnora ASA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |