Correlation Between Zegona Communications and State Bank
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and State Bank 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 State Bank 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 State Bank of, you can compare the effects of market volatilities on Zegona Communications and State Bank 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 State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and State Bank.
Diversification Opportunities for Zegona Communications and State Bank
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zegona and State is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Zegona Communications i.e., Zegona Communications and State Bank go up and down completely randomly.
Pair Corralation between Zegona Communications and State Bank
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 1.57 times more return on investment than State Bank. However, Zegona Communications is 1.57 times more volatile than State Bank of. It trades about 0.13 of its potential returns per unit of risk. State Bank of is currently generating about 0.03 per unit of risk. If you would invest 32,800 in Zegona Communications Plc on September 4, 2024 and sell it today you would earn a total of 2,400 from holding Zegona Communications Plc or generate 7.32% 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. State Bank of
Performance |
| Timeline |
| Zegona Communications Plc |
| State Bank |
Zegona Communications and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and State Bank
The main advantage of trading using opposite Zegona Communications and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank's long position.| Zegona Communications vs. Games Workshop Group | Zegona Communications vs. AJ Bell plc | Zegona Communications vs. Auto Trader Group | Zegona Communications vs. 4Imprint Group Plc |
| State Bank vs. Zegona Communications Plc | State Bank vs. Taylor Maritime Investments | State Bank vs. The Investment | State Bank vs. Public Storage |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |