Correlation Between Digi International and ZOOZ Power
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and ZOOZ Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and ZOOZ Power Ltd, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of ZOOZ Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and ZOOZ Power.
Diversification Opportunities for Digi International and ZOOZ Power
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Digi and ZOOZ is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and ZOOZ Power Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOOZ Power and Digi International 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 Digi International 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 Digi International i.e., Digi International and ZOOZ Power go up and down completely randomly.
Pair Corralation between Digi International and ZOOZ Power
Given the investment horizon of 90 days Digi International is expected to generate 5.97 times less return on investment than ZOOZ Power. But when comparing it to its historical volatility, Digi International is 1.64 times less risky than ZOOZ Power. It trades about 0.04 of its potential returns per unit of risk. ZOOZ Power Ltd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 281.00 in ZOOZ Power Ltd on September 12, 2024 and sell it today you would earn a total of 21.00 from holding ZOOZ Power Ltd or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. ZOOZ Power Ltd
Performance |
| Timeline |
| Digi International |
| ZOOZ Power |
Digi International and ZOOZ Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and ZOOZ Power
The main advantage of trading using opposite Digi International and ZOOZ Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Victory Integrity Smallmid Cap | Digi International vs. Hilton Worldwide Holdings | Digi International vs. NVIDIA | Digi International vs. JPMorgan Chase Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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