Correlation Between Zegona Communications and Systemair
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Systemair 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 Zegona Communications and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zegona Communications Plc and Systemair AB, you can compare the effects of market volatilities on Zegona Communications and Systemair 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 Zegona Communications with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Systemair.
Diversification Opportunities for Zegona Communications and Systemair
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zegona and Systemair is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Zegona Communications 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 Zegona Communications Plc are associated (or correlated) with Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Zegona Communications i.e., Zegona Communications and Systemair go up and down completely randomly.
Pair Corralation between Zegona Communications and Systemair
Assuming the 90 days trading horizon Zegona Communications Plc is expected to under-perform the Systemair. But the stock apears to be less risky and, when comparing its historical volatility, Zegona Communications Plc is 1.12 times less risky than Systemair. The stock trades about -0.01 of its potential returns per unit of risk. The Systemair AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 8,320 in Systemair AB on August 25, 2024 and sell it today you would earn a total of 760.00 from holding Systemair AB or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zegona Communications Plc vs. Systemair AB
Performance |
| Timeline |
| Zegona Communications Plc |
| Systemair AB |
Zegona Communications and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Systemair
The main advantage of trading using opposite Zegona Communications and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| Zegona Communications vs. Samsung Electronics Co | Zegona Communications vs. Samsung Electronics Co | Zegona Communications vs. Hyundai Motor | Zegona Communications vs. Toyota Motor Corp |
| Systemair vs. X FAB Silicon Foundries | Systemair vs. Darden Restaurants | Systemair vs. Summit Materials Cl | Systemair vs. Take Two Interactive Software |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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