Correlation Between Zegona Communications and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Lloyds Banking 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 Lloyds Banking 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 Lloyds Banking Group, you can compare the effects of market volatilities on Zegona Communications and Lloyds Banking 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 Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Lloyds Banking.
Diversification Opportunities for Zegona Communications and Lloyds Banking
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zegona and Lloyds is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking Group 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 Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of Zegona Communications i.e., Zegona Communications and Lloyds Banking go up and down completely randomly.
Pair Corralation between Zegona Communications and Lloyds Banking
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 11.79 times more return on investment than Lloyds Banking. However, Zegona Communications is 11.79 times more volatile than Lloyds Banking Group. It trades about 0.05 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.05 per unit of risk. If you would invest 7,950 in Zegona Communications Plc on September 13, 2024 and sell it today you would earn a total of 24,450 from holding Zegona Communications Plc or generate 307.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.76% |
| Values | Daily Returns |
Zegona Communications Plc vs. Lloyds Banking Group
Performance |
| Timeline |
| Zegona Communications Plc |
| Lloyds Banking Group |
Zegona Communications and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Lloyds Banking
The main advantage of trading using opposite Zegona Communications and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Lloyds Banking 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 Lloyds Banking will offset losses from the drop in Lloyds Banking's long position.| Zegona Communications vs. Bloomsbury Publishing Plc | Zegona Communications vs. Solstad Offshore ASA | Zegona Communications vs. Vienna Insurance Group | Zegona Communications vs. Verizon Communications |
| Lloyds Banking vs. Zoom Video Communications | Lloyds Banking vs. Global Net Lease | Lloyds Banking vs. bet at home AG | Lloyds Banking vs. Zegona 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |