Correlation Between Zegona Communications and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Schweiter Technologies 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 Schweiter Technologies 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 Schweiter Technologies AG, you can compare the effects of market volatilities on Zegona Communications and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Schweiter Technologies.
Diversification Opportunities for Zegona Communications and Schweiter Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zegona and Schweiter is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Zegona Communications i.e., Zegona Communications and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Zegona Communications and Schweiter Technologies
Assuming the 90 days trading horizon Zegona Communications Plc is expected to under-perform the Schweiter Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Zegona Communications Plc is 1.03 times less risky than Schweiter Technologies. The stock trades about -0.11 of its potential returns per unit of risk. The Schweiter Technologies AG is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 40,350 in Schweiter Technologies AG on September 13, 2024 and sell it today you would earn a total of 700.00 from holding Schweiter Technologies AG or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zegona Communications Plc vs. Schweiter Technologies AG
Performance |
| Timeline |
| Zegona Communications Plc |
| Schweiter Technologies |
Zegona Communications and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Schweiter Technologies
The main advantage of trading using opposite Zegona Communications and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Zegona Communications vs. Bloomsbury Publishing Plc | Zegona Communications vs. Solstad Offshore ASA | Zegona Communications vs. Vienna Insurance Group | Zegona Communications vs. Verizon Communications |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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