Correlation Between Equinix and Zedge
Can any of the company-specific risk be diversified away by investing in both Equinix and Zedge 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 Equinix and Zedge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and Zedge Inc, you can compare the effects of market volatilities on Equinix and Zedge 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 Equinix with a short position of Zedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and Zedge.
Diversification Opportunities for Equinix and Zedge
Excellent diversification
The 3 months correlation between Equinix and Zedge is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and Zedge Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedge Inc and Equinix 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 Equinix are associated (or correlated) with Zedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedge Inc has no effect on the direction of Equinix i.e., Equinix and Zedge go up and down completely randomly.
Pair Corralation between Equinix and Zedge
Given the investment horizon of 90 days Equinix is expected to generate 2.45 times less return on investment than Zedge. But when comparing it to its historical volatility, Equinix is 3.47 times less risky than Zedge. It trades about 0.07 of its potential returns per unit of risk. Zedge Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 187.00 in Zedge Inc on September 12, 2024 and sell it today you would earn a total of 81.00 from holding Zedge Inc or generate 43.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. Zedge Inc
Performance |
| Timeline |
| Equinix |
| Zedge Inc |
Equinix and Zedge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and Zedge
The main advantage of trading using opposite Equinix and Zedge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, Zedge 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 Zedge will offset losses from the drop in Zedge's long position.| Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable | Equinix vs. Digital Realty Trust | Equinix vs. SBA Communications Corp |
| Zedge vs. Twilio Inc | Zedge vs. Meta Platforms | Zedge vs. Alphabet Inc Class C | Zedge vs. Alphabet Inc Class A |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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