Correlation Between Zegona Communications and Camellia Plc
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Camellia 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 Camellia 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 Camellia Plc, you can compare the effects of market volatilities on Zegona Communications and Camellia 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 Camellia Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Camellia Plc.
Diversification Opportunities for Zegona Communications and Camellia Plc
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zegona and Camellia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Camellia Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia 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 Camellia Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Plc has no effect on the direction of Zegona Communications i.e., Zegona Communications and Camellia Plc go up and down completely randomly.
Pair Corralation between Zegona Communications and Camellia Plc
Assuming the 90 days trading horizon Zegona Communications is expected to generate 1.44 times less return on investment than Camellia Plc. But when comparing it to its historical volatility, Zegona Communications Plc is 1.22 times less risky than Camellia Plc. It trades about 0.15 of its potential returns per unit of risk. Camellia Plc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 445,000 in Camellia Plc on September 12, 2024 and sell it today you would earn a total of 51,000 from holding Camellia Plc or generate 11.46% 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. Camellia Plc
Performance |
| Timeline |
| Zegona Communications Plc |
| Camellia Plc |
Zegona Communications and Camellia Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Camellia Plc
The main advantage of trading using opposite Zegona Communications and Camellia Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Camellia 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 Camellia Plc will offset losses from the drop in Camellia Plc'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 |
| Camellia Plc vs. Wheaton Precious Metals | Camellia Plc vs. CleanTech Lithium plc | Camellia Plc vs. Litigation Capital Management | Camellia Plc vs. Cornish 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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