Correlation Between Zegona Communications and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Antofagasta PLC 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 Antofagasta PLC 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 Antofagasta PLC, you can compare the effects of market volatilities on Zegona Communications and Antofagasta PLC 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Antofagasta PLC.
Diversification Opportunities for Zegona Communications and Antofagasta PLC
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zegona and Antofagasta is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Zegona Communications i.e., Zegona Communications and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Zegona Communications and Antofagasta PLC
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 1.27 times more return on investment than Antofagasta PLC. However, Zegona Communications is 1.27 times more volatile than Antofagasta PLC. It trades about 0.12 of its potential returns per unit of risk. Antofagasta PLC is currently generating about 0.0 per unit of risk. If you would invest 19,900 in Zegona Communications Plc on September 1, 2024 and sell it today you would earn a total of 14,900 from holding Zegona Communications Plc or generate 74.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Zegona Communications Plc vs. Antofagasta PLC
Performance |
| Timeline |
| Zegona Communications Plc |
| Antofagasta PLC |
Zegona Communications and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Antofagasta PLC
The main advantage of trading using opposite Zegona Communications and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Zegona Communications vs. Atresmedia | Zegona Communications vs. CAP LEASE AVIATION | Zegona Communications vs. Live Nation Entertainment | Zegona Communications vs. XLMedia PLC |
| Antofagasta PLC vs. Zoom Video Communications | Antofagasta PLC vs. Orient Telecoms | Antofagasta PLC vs. Ecclesiastical Insurance Office | Antofagasta PLC vs. Spirent Communications plc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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