Correlation Between Zegona Communications and SkinBioTherapeutics
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and SkinBioTherapeutics 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 SkinBioTherapeutics 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 SkinBioTherapeutics PLC, you can compare the effects of market volatilities on Zegona Communications and SkinBioTherapeutics 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 SkinBioTherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and SkinBioTherapeutics.
Diversification Opportunities for Zegona Communications and SkinBioTherapeutics
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zegona and SkinBioTherapeutics is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and SkinBioTherapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SkinBioTherapeutics 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 SkinBioTherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SkinBioTherapeutics PLC has no effect on the direction of Zegona Communications i.e., Zegona Communications and SkinBioTherapeutics go up and down completely randomly.
Pair Corralation between Zegona Communications and SkinBioTherapeutics
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 0.76 times more return on investment than SkinBioTherapeutics. However, Zegona Communications Plc is 1.32 times less risky than SkinBioTherapeutics. It trades about 0.11 of its potential returns per unit of risk. SkinBioTherapeutics PLC is currently generating about -0.12 per unit of risk. If you would invest 33,000 in Zegona Communications Plc on August 30, 2024 and sell it today you would earn a total of 2,000 from holding Zegona Communications Plc or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zegona Communications Plc vs. SkinBioTherapeutics PLC
Performance |
| Timeline |
| Zegona Communications Plc |
| SkinBioTherapeutics PLC |
Zegona Communications and SkinBioTherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and SkinBioTherapeutics
The main advantage of trading using opposite Zegona Communications and SkinBioTherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, SkinBioTherapeutics 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 SkinBioTherapeutics will offset losses from the drop in SkinBioTherapeutics' long position.| Zegona Communications vs. Walmart | Zegona Communications vs. BYD Co | Zegona Communications vs. Volkswagen AG | Zegona Communications vs. Volkswagen AG Non Vtg |
| SkinBioTherapeutics vs. Samsung Electronics Co | SkinBioTherapeutics vs. Samsung Electronics Co | SkinBioTherapeutics vs. Toyota Motor Corp | SkinBioTherapeutics vs. MOL Hungarian Oil |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |