Correlation Between 1StdibsCom and Zumiez

Can any of the company-specific risk be diversified away by investing in both 1StdibsCom and Zumiez 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 1StdibsCom and Zumiez into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1StdibsCom and Zumiez Inc, you can compare the effects of market volatilities on 1StdibsCom and Zumiez 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 1StdibsCom with a short position of Zumiez. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and Zumiez.

Diversification Opportunities for 1StdibsCom and Zumiez

0.38

Correlation Coefficient

1StdibsCom  Zumiez

Weak diversification

The 3 months correlation between 1StdibsCom and Zumiez is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc and 1StdibsCom 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 1StdibsCom are associated (or correlated) with Zumiez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zumiez Inc has no effect on the direction of 1StdibsCom i.e., 1StdibsCom and Zumiez go up and down completely randomly.

Pair Corralation between 1StdibsCom and Zumiez

Given the investment horizon of 90 days 1StdibsCom is expected to generate 0.67 times more return on investment than Zumiez. However, 1StdibsCom is 1.48 times less risky than Zumiez. It trades about -0.07 of its potential returns per unit of risk. Zumiez Inc is currently generating about -0.17 per unit of risk. If you would invest  385.00  in 1StdibsCom on September 23, 2024 and sell it today you would lose (21.00) from holding 1StdibsCom or give up 5.45% of portfolio value over 90 days.

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

1StdibsCom  vs.  Zumiez Inc

1StdibsCom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1StdibsCom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Zumiez Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zumiez Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with 1StdibsCom and Zumiez

The main advantage of trading using opposite 1StdibsCom and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom position performs unexpectedly, Zumiez 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 Zumiez will offset losses from the drop in Zumiez's long position.

The idea behind 1StdibsCom and Zumiez Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.