Correlation Between Zillow Group and Onfolio Holdings
Can any of the company-specific risk be diversified away by investing in both Zillow Group and Onfolio Holdings 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 Onfolio Holdings 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 Onfolio Holdings, you can compare the effects of market volatilities on Zillow Group and Onfolio Holdings 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 Onfolio Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and Onfolio Holdings.
Diversification Opportunities for Zillow Group and Onfolio Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zillow and Onfolio is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and Onfolio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onfolio Holdings 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 Onfolio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onfolio Holdings has no effect on the direction of Zillow Group i.e., Zillow Group and Onfolio Holdings go up and down completely randomly.
Pair Corralation between Zillow Group and Onfolio Holdings
Taking into account the 90-day investment horizon Zillow Group Class is expected to generate 0.45 times more return on investment than Onfolio Holdings. However, Zillow Group Class is 2.22 times less risky than Onfolio Holdings. It trades about 0.07 of its potential returns per unit of risk. Onfolio Holdings is currently generating about 0.03 per unit of risk. If you would invest 3,620 in Zillow Group Class on September 5, 2024 and sell it today you would earn a total of 4,777 from holding Zillow Group Class or generate 131.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zillow Group Class vs. Onfolio Holdings
Performance |
| Timeline |
| Zillow Group Class |
| Onfolio Holdings |
Zillow Group and Onfolio Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zillow Group and Onfolio Holdings
The main advantage of trading using opposite Zillow Group and Onfolio Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group position performs unexpectedly, Onfolio Holdings 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 Onfolio Holdings will offset losses from the drop in Onfolio Holdings' long position.| Zillow Group vs. Pinterest | Zillow Group vs. Snap Inc | Zillow Group vs. Spotify Technology SA | Zillow Group vs. Twilio 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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