Correlation Between PetMed Express and Zumiez
Can any of the company-specific risk be diversified away by investing in both PetMed Express and Zumiez 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 PetMed Express and Zumiez into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetMed Express and Zumiez Inc, you can compare the effects of market volatilities on PetMed Express and Zumiez 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 PetMed Express with a short position of Zumiez. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetMed Express and Zumiez.
Diversification Opportunities for PetMed Express and Zumiez
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PetMed and Zumiez is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PetMed Express and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc and PetMed Express 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 PetMed Express are associated (or correlated) with Zumiez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumiez Inc has no effect on the direction of PetMed Express i.e., PetMed Express and Zumiez go up and down completely randomly.
Pair Corralation between PetMed Express and Zumiez
Given the investment horizon of 90 days PetMed Express is expected to under-perform the Zumiez. In addition to that, PetMed Express is 1.19 times more volatile than Zumiez Inc. It trades about -0.06 of its total potential returns per unit of risk. Zumiez Inc is currently generating about 0.01 per unit of volatility. If you would invest 2,320 in Zumiez Inc on August 23, 2024 and sell it today you would lose (120.00) from holding Zumiez Inc or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetMed Express vs. Zumiez Inc
Performance |
| Timeline |
| PetMed Express |
| Zumiez Inc |
PetMed Express and Zumiez Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetMed Express and Zumiez
The main advantage of trading using opposite PetMed Express and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetMed Express position performs unexpectedly, Zumiez 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 Zumiez will offset losses from the drop in Zumiez's long position.| PetMed Express vs. High Tide | PetMed Express vs. China Jo Jo Drugstores | PetMed Express vs. Walgreens Boots Alliance | PetMed Express vs. 111 Inc |
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 CEOs Directory module to screen CEOs from public companies around the world.
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