Correlation Between Zillow Group and EGPT
Can any of the company-specific risk be diversified away by investing in both Zillow Group and EGPT 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 Zillow Group and EGPT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zillow Group Class and EGPT, you can compare the effects of market volatilities on Zillow Group and EGPT 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 Zillow Group with a short position of EGPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and EGPT.
Diversification Opportunities for Zillow Group and EGPT
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zillow and EGPT is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and EGPT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGPT and Zillow Group 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 Zillow Group Class are associated (or correlated) with EGPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGPT has no effect on the direction of Zillow Group i.e., Zillow Group and EGPT go up and down completely randomly.
Pair Corralation between Zillow Group and EGPT
Taking into account the 90-day investment horizon Zillow Group Class is expected to generate 2.19 times more return on investment than EGPT. However, Zillow Group is 2.19 times more volatile than EGPT. It trades about 0.06 of its potential returns per unit of risk. EGPT is currently generating about -0.01 per unit of risk. If you would invest 4,323 in Zillow Group Class on September 3, 2024 and sell it today you would earn a total of 4,047 from holding Zillow Group Class or generate 93.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 28.0% |
| Values | Daily Returns |
Zillow Group Class vs. EGPT
Performance |
| Timeline |
| Zillow Group Class |
| EGPT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zillow Group and EGPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zillow Group and EGPT
The main advantage of trading using opposite Zillow Group and EGPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group position performs unexpectedly, EGPT 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 EGPT will offset losses from the drop in EGPT's long position.| Zillow Group vs. Pinterest | Zillow Group vs. Snap Inc | Zillow Group vs. Spotify Technology SA | Zillow Group vs. Twilio Inc |
| EGPT vs. iShares MSCI Malaysia | EGPT vs. iShares MSCI Hong | EGPT vs. iShares MSCI Australia | EGPT vs. iShares MSCI Taiwan |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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