Correlation Between Zegona Communications and Gruppo MutuiOnline
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Gruppo MutuiOnline 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 Gruppo MutuiOnline 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 Gruppo MutuiOnline SpA, you can compare the effects of market volatilities on Zegona Communications and Gruppo MutuiOnline 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 Gruppo MutuiOnline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Gruppo MutuiOnline.
Diversification Opportunities for Zegona Communications and Gruppo MutuiOnline
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zegona and Gruppo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Gruppo MutuiOnline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo MutuiOnline SpA 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 Gruppo MutuiOnline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo MutuiOnline SpA has no effect on the direction of Zegona Communications i.e., Zegona Communications and Gruppo MutuiOnline go up and down completely randomly.
Pair Corralation between Zegona Communications and Gruppo MutuiOnline
Assuming the 90 days trading horizon Zegona Communications is expected to generate 10.19 times less return on investment than Gruppo MutuiOnline. But when comparing it to its historical volatility, Zegona Communications Plc is 10.23 times less risky than Gruppo MutuiOnline. It trades about 0.12 of its potential returns per unit of risk. Gruppo MutuiOnline SpA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,201 in Gruppo MutuiOnline SpA on November 3, 2024 and sell it today you would earn a total of 479.00 from holding Gruppo MutuiOnline SpA or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 55.6% |
| Values | Daily Returns |
Zegona Communications Plc vs. Gruppo MutuiOnline SpA
Performance |
| Timeline |
| Zegona Communications Plc |
| Gruppo MutuiOnline SpA |
Zegona Communications and Gruppo MutuiOnline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Gruppo MutuiOnline
The main advantage of trading using opposite Zegona Communications and Gruppo MutuiOnline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Gruppo MutuiOnline 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 Gruppo MutuiOnline will offset losses from the drop in Gruppo MutuiOnline's long position.| Zegona Communications vs. Eastman Chemical Co | Zegona Communications vs. CAP LEASE AVIATION | Zegona Communications vs. First Majestic Silver | Zegona Communications vs. STMicroelectronics NV |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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