Correlation Between DB Base and Zillow Group

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

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

Diversification Opportunities for DB Base and Zillow Group

-0.77

Correlation Coefficient

DB Base  Zillow Group

Pay attention - limited upside

The 3 months correlation between BDDXF and Zillow is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding DB Base Metals and Zillow Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group Class and DB Base 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 DB Base Metals are associated (or correlated) with Zillow Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zillow Group Class has no effect on the direction of DB Base i.e., DB Base and Zillow Group go up and down completely randomly.

Pair Corralation between DB Base and Zillow Group

If you would invest  747.00  in DB Base Metals on October 9, 2024 and sell it today you would earn a total of  0.00  from holding DB Base Metals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

DB Base Metals  vs.  Zillow Group Class

DB Base Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DB Base Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DB Base is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Zillow Group Class

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zillow Group Class are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Zillow Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DB Base and Zillow Group

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

The idea behind DB Base Metals and Zillow Group Class 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.