Correlation Between Zegona Communications and Hershey
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Hershey 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 Hershey 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 Hershey Co, you can compare the effects of market volatilities on Zegona Communications and Hershey 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 Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Hershey.
Diversification Opportunities for Zegona Communications and Hershey
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zegona and Hershey is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey 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 Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Zegona Communications i.e., Zegona Communications and Hershey go up and down completely randomly.
Pair Corralation between Zegona Communications and Hershey
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 12.98 times more return on investment than Hershey. However, Zegona Communications is 12.98 times more volatile than Hershey Co. It trades about 0.06 of its potential returns per unit of risk. Hershey Co is currently generating about -0.07 per unit of risk. If you would invest 5,100 in Zegona Communications Plc on September 25, 2024 and sell it today you would earn a total of 32,900 from holding Zegona Communications Plc or generate 645.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.48% |
| Values | Daily Returns |
Zegona Communications Plc vs. Hershey Co
Performance |
| Timeline |
| Zegona Communications Plc |
| Hershey |
Zegona Communications and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Hershey
The main advantage of trading using opposite Zegona Communications and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| Zegona Communications vs. Future Metals NL | Zegona Communications vs. Golden Metal Resources | Zegona Communications vs. Medical Properties Trust | Zegona Communications vs. Fresenius Medical Care |
| Hershey vs. XLMedia PLC | Hershey vs. MediaZest plc | Hershey vs. Zinc Media Group | Hershey vs. Nordic Semiconductor 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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