Correlation Between ZOOZ Power and Rectitude Holdings
Can any of the company-specific risk be diversified away by investing in both ZOOZ Power and Rectitude 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 ZOOZ Power and Rectitude Holdings 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 Rectitude Holdings Ltd, you can compare the effects of market volatilities on ZOOZ Power and Rectitude 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 ZOOZ Power with a short position of Rectitude Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZOOZ Power and Rectitude Holdings.
Diversification Opportunities for ZOOZ Power and Rectitude Holdings
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZOOZ and Rectitude is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ZOOZ Power Ltd and Rectitude Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rectitude Holdings 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 Rectitude Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rectitude Holdings has no effect on the direction of ZOOZ Power i.e., ZOOZ Power and Rectitude Holdings go up and down completely randomly.
Pair Corralation between ZOOZ Power and Rectitude Holdings
Assuming the 90 days horizon ZOOZ Power Ltd is expected to generate 4.56 times more return on investment than Rectitude Holdings. However, ZOOZ Power is 4.56 times more volatile than Rectitude Holdings Ltd. It trades about 0.07 of its potential returns per unit of risk. Rectitude Holdings Ltd is currently generating about 0.11 per unit of risk. If you would invest 9.99 in ZOOZ Power Ltd on September 12, 2024 and sell it today you would lose (2.99) from holding ZOOZ Power Ltd or give up 29.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.71% |
| Values | Daily Returns |
ZOOZ Power Ltd vs. Rectitude Holdings Ltd
Performance |
| Timeline |
| ZOOZ Power |
| Rectitude Holdings |
ZOOZ Power and Rectitude Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZOOZ Power and Rectitude Holdings
The main advantage of trading using opposite ZOOZ Power and Rectitude Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZOOZ Power position performs unexpectedly, Rectitude 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 Rectitude Holdings will offset losses from the drop in Rectitude Holdings' long position.The idea behind ZOOZ Power Ltd and Rectitude Holdings Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Rectitude Holdings vs. ZOOZ Power Ltd | Rectitude Holdings vs. ZOOZ Power Ltd | Rectitude Holdings vs. JBDI Holdings Limited | Rectitude Holdings vs. Murphy USA |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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