Correlation Between Zegona Communications and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and GreenX Metals 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 GreenX Metals 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 GreenX Metals, you can compare the effects of market volatilities on Zegona Communications and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and GreenX Metals.
Diversification Opportunities for Zegona Communications and GreenX Metals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zegona and GreenX is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Zegona Communications i.e., Zegona Communications and GreenX Metals go up and down completely randomly.
Pair Corralation between Zegona Communications and GreenX Metals
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 0.8 times more return on investment than GreenX Metals. However, Zegona Communications Plc is 1.25 times less risky than GreenX Metals. It trades about 0.08 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.03 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. GreenX Metals
Performance |
| Timeline |
| Zegona Communications Plc |
| GreenX Metals |
Zegona Communications and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and GreenX Metals
The main advantage of trading using opposite Zegona Communications and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' 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 |
| GreenX Metals vs. Spirent Communications plc | GreenX Metals vs. Gamma Communications PLC | GreenX Metals vs. AMG Advanced Metallurgical | GreenX Metals vs. British American Tobacco |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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