Correlation Between FC Investment and Zegona Communications

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

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

Diversification Opportunities for FC Investment and Zegona Communications

-0.56

Correlation Coefficient

FC Investment  Zegona Communications

Excellent diversification

The 3 months correlation between FCIT and Zegona is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust 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 FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Zegona Communications go up and down completely randomly.

Pair Corralation between FC Investment and Zegona Communications

Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.27 times more return on investment than Zegona Communications. However, FC Investment Trust is 3.76 times less risky than Zegona Communications. It trades about -0.06 of its potential returns per unit of risk. Zegona Communications Plc is currently generating about -0.06 per unit of risk. If you would invest  112,200  in FC Investment Trust on September 23, 2024 and sell it today you would lose (1,000.00) from holding FC Investment Trust or give up 0.89% of portfolio value over 90 days.

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

FC Investment Trust  vs.  Zegona Communications Plc

FC Investment Trust

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FC Investment Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FC Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with FC Investment and Zegona Communications

The main advantage of trading using opposite FC Investment and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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 FC Investment Trust 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.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.