Correlation Between Ermenegildo Zegna and H M
Can any of the company-specific risk be diversified away by investing in both Ermenegildo Zegna and H M 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 Ermenegildo Zegna and H M into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ermenegildo Zegna NV and H M Hennes, you can compare the effects of market volatilities on Ermenegildo Zegna and H M 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 Ermenegildo Zegna with a short position of H M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ermenegildo Zegna and H M.
Diversification Opportunities for Ermenegildo Zegna and H M
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ermenegildo and HMRZF is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ermenegildo Zegna NV and H M Hennes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H M Hennes and Ermenegildo Zegna 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 Ermenegildo Zegna NV are associated (or correlated) with H M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H M Hennes has no effect on the direction of Ermenegildo Zegna i.e., Ermenegildo Zegna and H M go up and down completely randomly.
Pair Corralation between Ermenegildo Zegna and H M
Considering the 90-day investment horizon Ermenegildo Zegna NV is expected to under-perform the H M. But the stock apears to be less risky and, when comparing its historical volatility, Ermenegildo Zegna NV is 1.22 times less risky than H M. The stock trades about -0.01 of its potential returns per unit of risk. The H M Hennes is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,287 in H M Hennes on November 1, 2024 and sell it today you would earn a total of 62.00 from holding H M Hennes or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 67.14% |
| Values | Daily Returns |
Ermenegildo Zegna NV vs. H M Hennes
Performance |
| Timeline |
| Ermenegildo Zegna |
| H M Hennes |
Ermenegildo Zegna and H M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ermenegildo Zegna and H M
The main advantage of trading using opposite Ermenegildo Zegna and H M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ermenegildo Zegna position performs unexpectedly, H M 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 H M will offset losses from the drop in H M's long position.| Ermenegildo Zegna vs. Oxford Industries | Ermenegildo Zegna vs. G III Apparel Group | Ermenegildo Zegna vs. Kontoor Brands | Ermenegildo Zegna vs. Columbia Sportswear |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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