Correlation Between Appfolio and Zeta Global

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

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

Diversification Opportunities for Appfolio and Zeta Global

0.12

Correlation Coefficient

Appfolio  Zeta Global

Average diversification

The 3 months correlation between Appfolio and Zeta is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Appfolio and Zeta Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeta Global Holdings and Appfolio 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 Appfolio are associated (or correlated) with Zeta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeta Global Holdings has no effect on the direction of Appfolio i.e., Appfolio and Zeta Global go up and down completely randomly.

Pair Corralation between Appfolio and Zeta Global

Given the investment horizon of 90 days Appfolio is expected to generate 0.48 times more return on investment than Zeta Global. However, Appfolio is 2.1 times less risky than Zeta Global. It trades about -0.06 of its potential returns per unit of risk. Zeta Global Holdings is currently generating about -0.06 per unit of risk. If you would invest  24,723  in Appfolio on December 28, 2024 and sell it today you would lose (2,204) from holding Appfolio or give up 8.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Appfolio  vs.  Zeta Global Holdings

Appfolio

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appfolio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Zeta Global Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zeta Global Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Appfolio and Zeta Global

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

The idea behind Appfolio and Zeta Global Holdings 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.