Correlation Between Zegona Communications and Fonix Mobile
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Fonix Mobile 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 Fonix Mobile 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 Fonix Mobile plc, you can compare the effects of market volatilities on Zegona Communications and Fonix Mobile 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 Fonix Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Fonix Mobile.
Diversification Opportunities for Zegona Communications and Fonix Mobile
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zegona and Fonix is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Fonix Mobile plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonix Mobile 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 Fonix Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonix Mobile plc has no effect on the direction of Zegona Communications i.e., Zegona Communications and Fonix Mobile go up and down completely randomly.
Pair Corralation between Zegona Communications and Fonix Mobile
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 1.32 times more return on investment than Fonix Mobile. However, Zegona Communications is 1.32 times more volatile than Fonix Mobile plc. It trades about 0.08 of its potential returns per unit of risk. Fonix Mobile plc is currently generating about -0.01 per unit of risk. If you would invest 27,000 in Zegona Communications Plc on September 2, 2024 and sell it today you would earn a total of 7,800 from holding Zegona Communications Plc or generate 28.89% 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. Fonix Mobile plc
Performance |
| Timeline |
| Zegona Communications Plc |
| Fonix Mobile plc |
Zegona Communications and Fonix Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Fonix Mobile
The main advantage of trading using opposite Zegona Communications and Fonix Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Fonix Mobile 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 Fonix Mobile will offset losses from the drop in Fonix Mobile's long position.| Zegona Communications vs. Samsung Electronics Co | Zegona Communications vs. Samsung Electronics Co | Zegona Communications vs. Hyundai Motor | Zegona Communications vs. Toyota Motor Corp |
| Fonix Mobile vs. National Atomic Co | Fonix Mobile vs. Flutter Entertainment PLC | Fonix Mobile vs. Games Workshop Group | Fonix Mobile vs. Judges Scientific 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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