Correlation Between Zegona Communications and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both Zegona Communications and Aurora Investment 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 Zegona Communications and Aurora Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zegona Communications Plc and Aurora Investment Trust, you can compare the effects of market volatilities on Zegona Communications and Aurora Investment 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 Zegona Communications with a short position of Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zegona Communications and Aurora Investment.
Diversification Opportunities for Zegona Communications and Aurora Investment
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zegona and Aurora is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Zegona Communications Plc and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust and Zegona Communications 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 Zegona Communications Plc are associated (or correlated) with Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of Zegona Communications i.e., Zegona Communications and Aurora Investment go up and down completely randomly.
Pair Corralation between Zegona Communications and Aurora Investment
Assuming the 90 days trading horizon Zegona Communications Plc is expected to generate 2.53 times more return on investment than Aurora Investment. However, Zegona Communications is 2.53 times more volatile than Aurora Investment Trust. It trades about 0.08 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about 0.15 per unit of risk. If you would invest 122,500 in Zegona Communications Plc on September 12, 2025 and sell it today you would earn a total of 13,000 from holding Zegona Communications Plc or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zegona Communications Plc vs. Aurora Investment Trust
Performance |
| Timeline |
| Zegona Communications Plc |
| Aurora Investment Trust |
Zegona Communications and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zegona Communications and Aurora Investment
The main advantage of trading using opposite Zegona Communications and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zegona Communications position performs unexpectedly, Aurora Investment 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 Aurora Investment will offset losses from the drop in Aurora Investment's long position.| Zegona Communications vs. Fiinu PLC | Zegona Communications vs. Neo Energy Metals | Zegona Communications vs. Vinanz Limited | Zegona Communications vs. Vast Resources PLC |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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