Correlation Between Arbe Robotics and Zscaler

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

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

Diversification Opportunities for Arbe Robotics and Zscaler

-0.15

Correlation Coefficient

Arbe Robotics  Zscaler

Good diversification

The 3 months correlation between Arbe and Zscaler is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Arbe Robotics and Zscaler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zscaler and Arbe Robotics 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 Arbe Robotics are associated (or correlated) with Zscaler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zscaler has no effect on the direction of Arbe Robotics i.e., Arbe Robotics and Zscaler go up and down completely randomly.

Pair Corralation between Arbe Robotics and Zscaler

Given the investment horizon of 90 days Arbe Robotics is expected to generate 2.61 times more return on investment than Zscaler. However, Arbe Robotics is 2.61 times more volatile than Zscaler. It trades about 0.04 of its potential returns per unit of risk. Zscaler is currently generating about 0.01 per unit of risk. If you would invest  156.00  in Arbe Robotics on December 2, 2024 and sell it today you would earn a total of  29.00  from holding Arbe Robotics or generate 18.59% return on investment over 90 days.

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

Arbe Robotics  vs.  Zscaler

Arbe Robotics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Arbe Robotics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Arbe Robotics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Zscaler

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zscaler has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Zscaler is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Arbe Robotics and Zscaler

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

The idea behind Arbe Robotics and Zscaler 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 Transaction History module to view history of all your transactions and understand their impact on performance.