Correlation Between Zip Co and New Amer
Can any of the company-specific risk be diversified away by investing in both Zip Co and New Amer 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 Zip Co and New Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zip Co Limited and New Amer Energy, you can compare the effects of market volatilities on Zip Co and New Amer 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 Zip Co with a short position of New Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zip Co and New Amer.
Diversification Opportunities for Zip Co and New Amer
Very good diversification
The 3 months correlation between Zip and New is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Zip Co Limited and New Amer Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Amer Energy and Zip Co 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 Zip Co Limited are associated (or correlated) with New Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Amer Energy has no effect on the direction of Zip Co i.e., Zip Co and New Amer go up and down completely randomly.
Pair Corralation between Zip Co and New Amer
If you would invest 193.00 in Zip Co Limited on August 30, 2024 and sell it today you would earn a total of 37.00 from holding Zip Co Limited or generate 19.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Zip Co Limited vs. New Amer Energy
Performance |
| Timeline |
| Zip Co Limited |
| New Amer Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zip Co and New Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zip Co and New Amer
The main advantage of trading using opposite Zip Co and New Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zip Co position performs unexpectedly, New Amer 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 New Amer will offset losses from the drop in New Amer's long position.| Zip Co vs. Cosmos Group Holdings | Zip Co vs. Regional Management Corp | Zip Co vs. Enova International | Zip Co vs. Open Lending Corp |
| New Amer vs. Cosmos Group Holdings | New Amer vs. CYIOS | New Amer vs. Mill City Ventures | New Amer vs. Finance of America |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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