Correlation Between A2Z Smart and Zeo Energy

Can any of the company-specific risk be diversified away by investing in both A2Z Smart and Zeo Energy 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 A2Z Smart and Zeo Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A2Z Smart Technologies and Zeo Energy Corp, you can compare the effects of market volatilities on A2Z Smart and Zeo Energy 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 A2Z Smart with a short position of Zeo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of A2Z Smart and Zeo Energy.

Diversification Opportunities for A2Z Smart and Zeo Energy

-0.05

Correlation Coefficient

A2Z Smart  Zeo Energy

Good diversification

The 3 months correlation between A2Z and Zeo is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding A2Z Smart Technologies and Zeo Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zeo Energy Corp and A2Z Smart 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 A2Z Smart Technologies are associated (or correlated) with Zeo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zeo Energy Corp has no effect on the direction of A2Z Smart i.e., A2Z Smart and Zeo Energy go up and down completely randomly.

Pair Corralation between A2Z Smart and Zeo Energy

Allowing for the 90-day total investment horizon A2Z Smart is expected to generate 6.25 times less return on investment than Zeo Energy. But when comparing it to its historical volatility, A2Z Smart Technologies is 4.26 times less risky than Zeo Energy. It trades about 0.07 of its potential returns per unit of risk. Zeo Energy Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  136.00  in Zeo Energy Corp on December 2, 2024 and sell it today you would earn a total of  72.00  from holding Zeo Energy Corp or generate 52.94% return on investment over 90 days.

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

A2Z Smart Technologies  vs.  Zeo Energy Corp

A2Z Smart Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in A2Z Smart Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, A2Z Smart showed solid returns over the last few months and may actually be approaching a breakup point.

Zeo Energy Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zeo Energy Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Zeo Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with A2Z Smart and Zeo Energy

The main advantage of trading using opposite A2Z Smart and Zeo Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A2Z Smart position performs unexpectedly, Zeo Energy 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 Zeo Energy will offset losses from the drop in Zeo Energy's long position.

The idea behind A2Z Smart Technologies and Zeo Energy Corp 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.