Correlation Between DoorDash, and Zillow

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

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

Diversification Opportunities for DoorDash, and Zillow

0.4

Correlation Coefficient

DoorDash,  Zillow

Very weak diversification

The 3 months correlation between DoorDash, and Zillow is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding DoorDash, Class A and Zillow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group and DoorDash, 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 DoorDash, Class A are associated (or correlated) with Zillow. 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 has no effect on the direction of DoorDash, i.e., DoorDash, and Zillow go up and down completely randomly.

Pair Corralation between DoorDash, and Zillow

Given the investment horizon of 90 days DoorDash, Class A is expected to generate 0.89 times more return on investment than Zillow. However, DoorDash, Class A is 1.13 times less risky than Zillow. It trades about 0.13 of its potential returns per unit of risk. Zillow Group is currently generating about 0.0 per unit of risk. If you would invest  17,057  in DoorDash, Class A on December 26, 2024 and sell it today you would earn a total of  2,915  from holding DoorDash, Class A or generate 17.09% return on investment over 90 days.

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

DoorDash, Class A  vs.  Zillow Group

DoorDash, Class A

Risk-Adjusted Performance

OK

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

Zillow Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with DoorDash, and Zillow

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

The idea behind DoorDash, Class A and Zillow Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.