Correlation Between Zegona Communications and Delta Air
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on Zegona Communications and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Delta Air.
Diversification Opportunities for Zegona Communications and Delta Air
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zegona and Delta is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Zegona Communications i.e., Zegona Communications and Delta Air go up and down completely randomly.
Pair Corralation between Zegona Communications and Delta Air
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 1.43 times more return on investment than Delta Air. However, Zegona Communications is 1.43 times more volatile than Delta Air Lines. It trades about 0.1 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.1 per unit of risk. If you would invest 17,000 in Zegona Communications Plc on September 12, 2024 and sell it today you would earn a total of 15,400 from holding Zegona Communications Plc or generate 90.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Zegona Communications Plc vs. Delta Air Lines
Performance |
| Timeline |
| Zegona Communications Plc |
| Delta Air Lines |
Zegona Communications and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Delta Air
The main advantage of trading using opposite Zegona Communications and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| Zegona Communications vs. Catalyst Media Group | Zegona Communications vs. CATLIN GROUP | Zegona Communications vs. Tamburi Investment Partners | Zegona Communications vs. Magnora ASA |
| Delta Air vs. Hong Kong Land | Delta Air vs. Neometals | Delta Air vs. Coor Service Management | Delta Air vs. Fidelity Sustainable USD |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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