Correlation Between ACDC Metals and Zoom2u Technologies

Can any of the company-specific risk be diversified away by investing in both ACDC Metals and Zoom2u Technologies 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 ACDC Metals and Zoom2u Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACDC Metals and Zoom2u Technologies, you can compare the effects of market volatilities on ACDC Metals and Zoom2u Technologies 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 ACDC Metals with a short position of Zoom2u Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and Zoom2u Technologies.

Diversification Opportunities for ACDC Metals and Zoom2u Technologies

0.32

Correlation Coefficient

ACDC Metals  Zoom2u Technologies

Weak diversification

The 3 months correlation between ACDC and Zoom2u is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and Zoom2u Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom2u Technologies and ACDC Metals 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 ACDC Metals are associated (or correlated) with Zoom2u Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom2u Technologies has no effect on the direction of ACDC Metals i.e., ACDC Metals and Zoom2u Technologies go up and down completely randomly.

Pair Corralation between ACDC Metals and Zoom2u Technologies

Assuming the 90 days trading horizon ACDC Metals is expected to generate 1.79 times more return on investment than Zoom2u Technologies. However, ACDC Metals is 1.79 times more volatile than Zoom2u Technologies. It trades about -0.14 of its potential returns per unit of risk. Zoom2u Technologies is currently generating about -0.31 per unit of risk. If you would invest  5.50  in ACDC Metals on December 20, 2024 and sell it today you would lose (1.40) from holding ACDC Metals or give up 25.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

ACDC Metals  vs.  Zoom2u Technologies

ACDC Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days ACDC Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Zoom2u Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoom2u Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ACDC Metals and Zoom2u Technologies

The main advantage of trading using opposite ACDC Metals and Zoom2u Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals position performs unexpectedly, Zoom2u Technologies 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 Zoom2u Technologies will offset losses from the drop in Zoom2u Technologies' long position.

The idea behind ACDC Metals and Zoom2u Technologies 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.