Correlation Between Zegona Communications and Target Healthcare
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Target Healthcare 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 Target Healthcare 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 Target Healthcare REIT, you can compare the effects of market volatilities on Zegona Communications and Target Healthcare 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 Target Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Target Healthcare.
Diversification Opportunities for Zegona Communications and Target Healthcare
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zegona and Target is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Target Healthcare REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Healthcare REIT 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 Target Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Healthcare REIT has no effect on the direction of Zegona Communications i.e., Zegona Communications and Target Healthcare go up and down completely randomly.
Pair Corralation between Zegona Communications and Target Healthcare
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 7.47 times more return on investment than Target Healthcare. However, Zegona Communications is 7.47 times more volatile than Target Healthcare REIT. It trades about 0.05 of its potential returns per unit of risk. Target Healthcare REIT is currently generating about 0.03 per unit of risk. If you would invest 7,950 in Zegona Communications Plc on September 2, 2024 and sell it today you would earn a total of 26,850 from holding Zegona Communications Plc or generate 337.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.23% |
| Values | Daily Returns |
Zegona Communications Plc vs. Target Healthcare REIT
Performance |
| Timeline |
| Zegona Communications Plc |
| Target Healthcare REIT |
Zegona Communications and Target Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Target Healthcare
The main advantage of trading using opposite Zegona Communications and Target Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Target Healthcare 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 Target Healthcare will offset losses from the drop in Target Healthcare'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 |
| Target Healthcare vs. Hammerson PLC | Target Healthcare vs. Workspace Group PLC | Target Healthcare vs. Supermarket Income REIT | Target Healthcare vs. Diversified Energy |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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