Correlation Between Park Electrochemical and ZOOZ Power
Can any of the company-specific risk be diversified away by investing in both Park Electrochemical 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 Park Electrochemical and ZOOZ Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Electrochemical and ZOOZ Power Ltd, you can compare the effects of market volatilities on Park Electrochemical 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 Park Electrochemical with a short position of ZOOZ Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Electrochemical and ZOOZ Power.
Diversification Opportunities for Park Electrochemical and ZOOZ Power
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and ZOOZ is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Park Electrochemical and ZOOZ Power Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOOZ Power and Park Electrochemical 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 Park Electrochemical 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 Park Electrochemical i.e., Park Electrochemical and ZOOZ Power go up and down completely randomly.
Pair Corralation between Park Electrochemical and ZOOZ Power
Considering the 90-day investment horizon Park Electrochemical is expected to generate 3.63 times less return on investment than ZOOZ Power. But when comparing it to its historical volatility, Park Electrochemical is 1.48 times less risky than ZOOZ Power. It trades about 0.1 of its potential returns per unit of risk. ZOOZ Power Ltd is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 235.00 in ZOOZ Power Ltd on August 24, 2024 and sell it today you would earn a total of 42.00 from holding ZOOZ Power Ltd or generate 17.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Electrochemical vs. ZOOZ Power Ltd
Performance |
| Timeline |
| Park Electrochemical |
| ZOOZ Power |
Park Electrochemical and ZOOZ Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Electrochemical and ZOOZ Power
The main advantage of trading using opposite Park Electrochemical and ZOOZ Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Electrochemical 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.| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
| ZOOZ Power vs. ODP Corp | ZOOZ Power vs. Sally Beauty Holdings | ZOOZ Power vs. Savers Value Village, | ZOOZ Power vs. Container Store Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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