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

0.0

Correlation Coefficient

Grand Vision  Zegona Communications

Pay attention - limited upside

The 3 months correlation between Grand and Zegona is 0.0. 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

If you would invest  34,600  in Zegona Communications Plc on December 4, 2024 and sell it today you would earn a total of  20,900  from holding Zegona Communications Plc or generate 60.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grand Vision Media  vs.  Zegona Communications Plc

Grand Vision Media

Risk-Adjusted Performance

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 comparatively stable basic indicators, Grand Vision is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Zegona Communications Plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zegona Communications Plc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Zegona Communications exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.