Correlation Between Hunter Group and Zenith Energy
Can any of the company-specific risk be diversified away by investing in both Hunter Group and Zenith Energy 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 Hunter Group and Zenith Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunter Group ASA and Zenith Energy, you can compare the effects of market volatilities on Hunter Group and Zenith Energy 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 Hunter Group with a short position of Zenith Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunter Group and Zenith Energy.
Diversification Opportunities for Hunter Group and Zenith Energy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hunter and Zenith is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Group ASA and Zenith Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zenith Energy and Hunter Group 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 Hunter Group ASA are associated (or correlated) with Zenith Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zenith Energy has no effect on the direction of Hunter Group i.e., Hunter Group and Zenith Energy go up and down completely randomly.
Pair Corralation between Hunter Group and Zenith Energy
Assuming the 90 days trading horizon Hunter Group ASA is expected to under-perform the Zenith Energy. In addition to that, Hunter Group is 1.14 times more volatile than Zenith Energy. It trades about -0.18 of its total potential returns per unit of risk. Zenith Energy is currently generating about 0.02 per unit of volatility. If you would invest 19.00 in Zenith Energy on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Zenith Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunter Group ASA vs. Zenith Energy
Performance |
| Timeline |
| Hunter Group ASA |
| Zenith Energy |
Hunter Group and Zenith Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunter Group and Zenith Energy
The main advantage of trading using opposite Hunter Group and Zenith Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Group position performs unexpectedly, Zenith Energy 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 Zenith Energy will offset losses from the drop in Zenith Energy's long position.| Hunter Group vs. Okeanis Eco Tankers | Hunter Group vs. Frontline | Hunter Group vs. BW LPG | Hunter Group vs. FLEX LNG |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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