Correlation Between Grand Vision and Zegona Communications

Can any of the company-specific risk be diversified away by investing in both Grand Vision and Zegona Communications 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 Grand Vision and Zegona Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grand Vision Media and Zegona Communications Plc, you can compare the effects of market volatilities on Grand Vision and Zegona Communications 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 Grand Vision with a short position of Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Vision and Zegona Communications.

Diversification Opportunities for Grand Vision and Zegona Communications

0.33

Correlation Coefficient

Grand Vision  Zegona Communications

Weak diversification

The 3 months correlation between Grand and Zegona is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grand Vision Media and Zegona Communications Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zegona Communications Plc and Grand Vision 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 Grand Vision Media are associated (or correlated) with Zegona Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zegona Communications Plc has no effect on the direction of Grand Vision i.e., Grand Vision and Zegona Communications go up and down completely randomly.

Pair Corralation between Grand Vision and Zegona Communications

Assuming the 90 days trading horizon Grand Vision Media is expected to under-perform the Zegona Communications. In addition to that, Grand Vision is 1.51 times more volatile than Zegona Communications Plc. It trades about -0.12 of its total potential returns per unit of risk. Zegona Communications Plc is currently generating about -0.01 per unit of volatility. If you would invest  33,000  in Zegona Communications Plc on September 15, 2024 and sell it today you would lose (1,000.00) from holding Zegona Communications Plc or give up 3.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Grand Vision Media  vs.  Zegona Communications Plc

Grand Vision Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Vision Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Zegona Communications Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zegona Communications Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Zegona Communications is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Grand Vision and Zegona Communications

The main advantage of trading using opposite Grand Vision and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Vision position performs unexpectedly, Zegona Communications 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 Zegona Communications will offset losses from the drop in Zegona Communications' long position.

The idea behind Grand Vision Media and Zegona Communications Plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.