Correlation Between Etsy and ZENERGY B

Can any of the company-specific risk be diversified away by investing in both Etsy and ZENERGY B 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 Etsy and ZENERGY B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Etsy Inc and ZENERGY B AB, you can compare the effects of market volatilities on Etsy and ZENERGY B 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 Etsy with a short position of ZENERGY B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etsy and ZENERGY B.

Diversification Opportunities for Etsy and ZENERGY B

-0.75

Correlation Coefficient

Etsy  ZENERGY B

Pay attention - limited upside

The 3 months correlation between Etsy and ZENERGY is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc and ZENERGY B AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZENERGY B AB and Etsy 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 Etsy Inc are associated (or correlated) with ZENERGY B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZENERGY B AB has no effect on the direction of Etsy i.e., Etsy and ZENERGY B go up and down completely randomly.

Pair Corralation between Etsy and ZENERGY B

Assuming the 90 days trading horizon Etsy Inc is expected to under-perform the ZENERGY B. But the stock apears to be less risky and, when comparing its historical volatility, Etsy Inc is 39.19 times less risky than ZENERGY B. The stock trades about -0.04 of its potential returns per unit of risk. The ZENERGY B AB is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  500.00  in ZENERGY B AB on September 17, 2024 and sell it today you would lose (478.00) from holding ZENERGY B AB or give up 95.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Etsy Inc  vs.  ZENERGY B AB

Etsy Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Etsy Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Etsy unveiled solid returns over the last few months and may actually be approaching a breakup point.

ZENERGY B AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZENERGY B AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Etsy and ZENERGY B

The main advantage of trading using opposite Etsy and ZENERGY B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etsy position performs unexpectedly, ZENERGY B 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 ZENERGY B will offset losses from the drop in ZENERGY B's long position.

The idea behind Etsy Inc and ZENERGY B AB 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.