Correlation Between ZOOZ Power and British Amer
Can any of the company-specific risk be diversified away by investing in both ZOOZ Power and British 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 ZOOZ Power and British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZOOZ Power Ltd and British American Tobacco, you can compare the effects of market volatilities on ZOOZ Power and British 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 ZOOZ Power with a short position of British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZOOZ Power and British Amer.
Diversification Opportunities for ZOOZ Power and British Amer
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ZOOZ and British is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ZOOZ Power Ltd and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and ZOOZ Power 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 ZOOZ Power Ltd are associated (or correlated) with British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of ZOOZ Power i.e., ZOOZ Power and British Amer go up and down completely randomly.
Pair Corralation between ZOOZ Power and British Amer
Assuming the 90 days horizon ZOOZ Power Ltd is expected to generate 13.64 times more return on investment than British Amer. However, ZOOZ Power is 13.64 times more volatile than British American Tobacco. It trades about 0.22 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.28 per unit of risk. If you would invest 4.60 in ZOOZ Power Ltd on November 3, 2024 and sell it today you would earn a total of 1.73 from holding ZOOZ Power Ltd or generate 37.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
ZOOZ Power Ltd vs. British American Tobacco
Performance |
| Timeline |
| ZOOZ Power |
| British American Tobacco |
ZOOZ Power and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZOOZ Power and British Amer
The main advantage of trading using opposite ZOOZ Power and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZOOZ Power position performs unexpectedly, British 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 British Amer will offset losses from the drop in British Amer's long position.| ZOOZ Power vs. One Group Hospitality | ZOOZ Power vs. Skillz Platform | ZOOZ Power vs. Dine Brands Global | ZOOZ Power vs. Hochschild Mining PLC |
| British Amer vs. Philip Morris International | British Amer vs. Universal | British Amer vs. Imperial Brands PLC | British Amer vs. Altria 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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