Correlation Between Zedge and Abcellera Biologics
Can any of the company-specific risk be diversified away by investing in both Zedge and Abcellera Biologics 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 Zedge and Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zedge Inc and Abcellera Biologics, you can compare the effects of market volatilities on Zedge and Abcellera Biologics 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 Zedge with a short position of Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zedge and Abcellera Biologics.
Diversification Opportunities for Zedge and Abcellera Biologics
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zedge and Abcellera is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and Zedge 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 Zedge Inc are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Zedge i.e., Zedge and Abcellera Biologics go up and down completely randomly.
Pair Corralation between Zedge and Abcellera Biologics
Given the investment horizon of 90 days Zedge Inc is expected to generate 0.78 times more return on investment than Abcellera Biologics. However, Zedge Inc is 1.28 times less risky than Abcellera Biologics. It trades about 0.0 of its potential returns per unit of risk. Abcellera Biologics is currently generating about -0.08 per unit of risk. If you would invest 281.00 in Zedge Inc on September 12, 2024 and sell it today you would lose (2.00) from holding Zedge Inc or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zedge Inc vs. Abcellera Biologics
Performance |
| Timeline |
| Zedge Inc |
| Abcellera Biologics |
Zedge and Abcellera Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zedge and Abcellera Biologics
The main advantage of trading using opposite Zedge and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedge position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.| Zedge vs. Twilio Inc | Zedge vs. Meta Platforms | Zedge vs. Alphabet Inc Class C | Zedge vs. Alphabet Inc Class A |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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