Correlation Between PARAGON GROUP and ZENERGY B

Can any of the company-specific risk be diversified away by investing in both PARAGON GROUP and ZENERGY B 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 PARAGON GROUP and ZENERGY B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PARAGON GROUP and ZENERGY B AB, you can compare the effects of market volatilities on PARAGON GROUP and ZENERGY B 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 PARAGON GROUP with a short position of ZENERGY B. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARAGON GROUP and ZENERGY B.

Diversification Opportunities for PARAGON GROUP and ZENERGY B

-0.59

Correlation Coefficient

PARAGON GROUP  ZENERGY B

Excellent diversification

The 3 months correlation between PARAGON and ZENERGY is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PARAGON GROUP and ZENERGY B AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZENERGY B AB and PARAGON GROUP 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 PARAGON GROUP are associated (or correlated) with ZENERGY B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZENERGY B AB has no effect on the direction of PARAGON GROUP i.e., PARAGON GROUP and ZENERGY B go up and down completely randomly.

Pair Corralation between PARAGON GROUP and ZENERGY B

Assuming the 90 days trading horizon PARAGON GROUP is expected to generate 177.98 times less return on investment than ZENERGY B. But when comparing it to its historical volatility, PARAGON GROUP is 73.0 times less risky than ZENERGY B. It trades about 0.06 of its potential returns per unit of risk. ZENERGY B AB is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  220.00  in ZENERGY B AB on September 17, 2024 and sell it today you would lose (198.00) from holding ZENERGY B AB or give up 90.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

PARAGON GROUP  vs.  ZENERGY B AB

PARAGON GROUP

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PARAGON GROUP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, PARAGON GROUP is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

ZENERGY B AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZENERGY B AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with PARAGON GROUP and ZENERGY B

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

The idea behind PARAGON GROUP and ZENERGY B AB 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.