Correlation Between Zegona Communications and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Baker Hughes 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 Baker Hughes 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 Baker Hughes Co, you can compare the effects of market volatilities on Zegona Communications and Baker Hughes 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 Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Baker Hughes.
Diversification Opportunities for Zegona Communications and Baker Hughes
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zegona and Baker is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes 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 Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Zegona Communications i.e., Zegona Communications and Baker Hughes go up and down completely randomly.
Pair Corralation between Zegona Communications and Baker Hughes
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 3.39 times more return on investment than Baker Hughes. However, Zegona Communications is 3.39 times more volatile than Baker Hughes Co. It trades about 0.24 of its potential returns per unit of risk. Baker Hughes Co is currently generating about 0.05 per unit of risk. If you would invest 32,000 in Zegona Communications Plc on October 13, 2024 and sell it today you would earn a total of 7,600 from holding Zegona Communications Plc or generate 23.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Zegona Communications Plc vs. Baker Hughes Co
Performance |
| Timeline |
| Zegona Communications Plc |
| Baker Hughes |
Zegona Communications and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Baker Hughes
The main advantage of trading using opposite Zegona Communications and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| Zegona Communications vs. European Metals Holdings | Zegona Communications vs. PureTech Health plc | Zegona Communications vs. Eneraqua Technologies PLC | Zegona Communications vs. Concurrent Technologies Plc |
| Baker Hughes vs. Lundin Mining Corp | Baker Hughes vs. Deltex Medical Group | Baker Hughes vs. Cornish Metals | Baker Hughes vs. URU Metals |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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