Correlation Between Advance Auto and ZOOZ Power
Can any of the company-specific risk be diversified away by investing in both Advance Auto and ZOOZ Power 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 Advance Auto and ZOOZ Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advance Auto Parts and ZOOZ Power Ltd, you can compare the effects of market volatilities on Advance Auto and ZOOZ Power 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 Advance Auto with a short position of ZOOZ Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advance Auto and ZOOZ Power.
Diversification Opportunities for Advance Auto and ZOOZ Power
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advance and ZOOZ is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Advance Auto Parts and ZOOZ Power Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOOZ Power and Advance Auto 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 Advance Auto Parts are associated (or correlated) with ZOOZ Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZOOZ Power has no effect on the direction of Advance Auto i.e., Advance Auto and ZOOZ Power go up and down completely randomly.
Pair Corralation between Advance Auto and ZOOZ Power
Considering the 90-day investment horizon Advance Auto Parts is expected to generate 1.48 times more return on investment than ZOOZ Power. However, Advance Auto is 1.48 times more volatile than ZOOZ Power Ltd. It trades about 0.11 of its potential returns per unit of risk. ZOOZ Power Ltd is currently generating about 0.03 per unit of risk. If you would invest 3,991 in Advance Auto Parts on September 13, 2024 and sell it today you would earn a total of 338.50 from holding Advance Auto Parts or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advance Auto Parts vs. ZOOZ Power Ltd
Performance |
| Timeline |
| Advance Auto Parts |
| ZOOZ Power |
Advance Auto and ZOOZ Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advance Auto and ZOOZ Power
The main advantage of trading using opposite Advance Auto and ZOOZ Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advance Auto position performs unexpectedly, ZOOZ Power 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 ZOOZ Power will offset losses from the drop in ZOOZ Power's long position.| Advance Auto vs. AutoZone | Advance Auto vs. Tractor Supply | Advance Auto vs. Genuine Parts Co | Advance Auto vs. Five Below |
| ZOOZ Power vs. ZOOZ Power Ltd | ZOOZ Power vs. JBDI Holdings Limited | ZOOZ Power vs. Nuvve Holding Corp | ZOOZ Power vs. Creative Global Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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