Correlation Between Fenbo Holdings and Ermenegildo Zegna
Can any of the company-specific risk be diversified away by investing in both Fenbo Holdings and Ermenegildo Zegna 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 Fenbo Holdings and Ermenegildo Zegna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fenbo Holdings Limited and Ermenegildo Zegna NV, you can compare the effects of market volatilities on Fenbo Holdings and Ermenegildo Zegna 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 Fenbo Holdings with a short position of Ermenegildo Zegna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fenbo Holdings and Ermenegildo Zegna.
Diversification Opportunities for Fenbo Holdings and Ermenegildo Zegna
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fenbo and Ermenegildo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fenbo Holdings Limited and Ermenegildo Zegna NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ermenegildo Zegna and Fenbo Holdings 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 Fenbo Holdings Limited are associated (or correlated) with Ermenegildo Zegna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ermenegildo Zegna has no effect on the direction of Fenbo Holdings i.e., Fenbo Holdings and Ermenegildo Zegna go up and down completely randomly.
Pair Corralation between Fenbo Holdings and Ermenegildo Zegna
Given the investment horizon of 90 days Fenbo Holdings Limited is expected to under-perform the Ermenegildo Zegna. In addition to that, Fenbo Holdings is 3.13 times more volatile than Ermenegildo Zegna NV. It trades about -0.11 of its total potential returns per unit of risk. Ermenegildo Zegna NV is currently generating about -0.01 per unit of volatility. If you would invest 1,032 in Ermenegildo Zegna NV on November 2, 2024 and sell it today you would lose (89.00) from holding Ermenegildo Zegna NV or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fenbo Holdings Limited vs. Ermenegildo Zegna NV
Performance |
| Timeline |
| Fenbo Holdings |
| Ermenegildo Zegna |
Fenbo Holdings and Ermenegildo Zegna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fenbo Holdings and Ermenegildo Zegna
The main advantage of trading using opposite Fenbo Holdings and Ermenegildo Zegna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fenbo Holdings position performs unexpectedly, Ermenegildo Zegna 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 Ermenegildo Zegna will offset losses from the drop in Ermenegildo Zegna's long position.| Fenbo Holdings vs. Tarsus Pharmaceuticals | Fenbo Holdings vs. Reliance Steel Aluminum | Fenbo Holdings vs. Ironveld Plc | Fenbo Holdings vs. Olympic Steel |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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