Correlation Between Zegona Communications and Jersey Electricity
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Jersey Electricity 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 Jersey Electricity 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 Jersey Electricity plc, you can compare the effects of market volatilities on Zegona Communications and Jersey Electricity 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 Jersey Electricity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Jersey Electricity.
Diversification Opportunities for Zegona Communications and Jersey Electricity
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zegona and Jersey is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Jersey Electricity plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jersey Electricity 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 Jersey Electricity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jersey Electricity plc has no effect on the direction of Zegona Communications i.e., Zegona Communications and Jersey Electricity go up and down completely randomly.
Pair Corralation between Zegona Communications and Jersey Electricity
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 20.92 times more return on investment than Jersey Electricity. However, Zegona Communications is 20.92 times more volatile than Jersey Electricity plc. It trades about 0.06 of its potential returns per unit of risk. Jersey Electricity plc is currently generating about -0.01 per unit of risk. If you would invest 4,900 in Zegona Communications Plc on September 2, 2024 and sell it today you would earn a total of 29,900 from holding Zegona Communications Plc or generate 610.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.45% |
| Values | Daily Returns |
Zegona Communications Plc vs. Jersey Electricity plc
Performance |
| Timeline |
| Zegona Communications Plc |
| Jersey Electricity plc |
Zegona Communications and Jersey Electricity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Jersey Electricity
The main advantage of trading using opposite Zegona Communications and Jersey Electricity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Jersey Electricity 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 Jersey Electricity will offset losses from the drop in Jersey Electricity'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 |
| Jersey Electricity vs. Compal Electronics GDR | Jersey Electricity vs. Samsung Electronics Co | Jersey Electricity vs. Electronic Arts | Jersey Electricity vs. Coeur Mining |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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