Correlation Between Zegona Communications and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and SANTANDER 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 SANTANDER 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 SANTANDER UK 10, you can compare the effects of market volatilities on Zegona Communications and SANTANDER 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 SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and SANTANDER.
Diversification Opportunities for Zegona Communications and SANTANDER
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zegona and SANTANDER is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and SANTANDER UK 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 10 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 SANTANDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK 10 has no effect on the direction of Zegona Communications i.e., Zegona Communications and SANTANDER go up and down completely randomly.
Pair Corralation between Zegona Communications and SANTANDER
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 16.83 times more return on investment than SANTANDER. However, Zegona Communications is 16.83 times more volatile than SANTANDER UK 10. It trades about 0.05 of its potential returns per unit of risk. SANTANDER UK 10 is currently generating about 0.06 per unit of risk. If you would invest 7,950 in Zegona Communications Plc on September 12, 2024 and sell it today you would earn a total of 25,050 from holding Zegona Communications Plc or generate 315.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.76% |
| Values | Daily Returns |
Zegona Communications Plc vs. SANTANDER UK 10
Performance |
| Timeline |
| Zegona Communications Plc |
| SANTANDER UK 10 |
Zegona Communications and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and SANTANDER
The main advantage of trading using opposite Zegona Communications and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, SANTANDER 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 SANTANDER will offset losses from the drop in SANTANDER'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 |
| SANTANDER vs. Alior Bank SA | SANTANDER vs. Zegona Communications Plc | SANTANDER vs. Sparebank 1 SR | SANTANDER vs. Cembra Money Bank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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