Correlation Between Zayo Group and Telephone

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

By analyzing existing cross correlation between Zayo Group Holdings and Telephone and Data, you can compare the effects of market volatilities on Zayo Group and Telephone 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 Zayo Group with a short position of Telephone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zayo Group and Telephone.

Diversification Opportunities for Zayo Group and Telephone

0.0

Correlation Coefficient

Zayo Group  Telephone

Pay attention - limited upside

The 3 months correlation between Zayo and Telephone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zayo Group Holdings and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data and Zayo 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 Zayo Group Holdings are associated (or correlated) with Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of Zayo Group i.e., Zayo Group and Telephone go up and down completely randomly.

Pair Corralation between Zayo Group and Telephone

If you would invest  1,645  in Telephone and Data on January 20, 2024 and sell it today you would lose (130.00) from holding Telephone and Data or give up 7.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Zayo Group Holdings  vs.  Telephone and Data

Zayo Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zayo Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Zayo Group is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Telephone and Data

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telephone and Data 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 fundamental indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Zayo Group and Telephone

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

The idea behind Zayo Group Holdings and Telephone and Data 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.