Correlation Between Trump Media and Zedge

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

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

Diversification Opportunities for Trump Media and Zedge

-0.13

Correlation Coefficient

Trump Media  Zedge

Good diversification

The 3 months correlation between Trump and Zedge is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Trump Media Technology and Zedge Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedge Inc and Trump Media 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 Trump Media Technology are associated (or correlated) with Zedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedge Inc has no effect on the direction of Trump Media i.e., Trump Media and Zedge go up and down completely randomly.

Pair Corralation between Trump Media and Zedge

Assuming the 90 days horizon Trump Media Technology is expected to generate 0.73 times more return on investment than Zedge. However, Trump Media Technology is 1.37 times less risky than Zedge. It trades about -0.09 of its potential returns per unit of risk. Zedge Inc is currently generating about -0.14 per unit of risk. If you would invest  2,171  in Trump Media Technology on December 2, 2024 and sell it today you would lose (110.00) from holding Trump Media Technology or give up 5.07% of portfolio value over 90 days.

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

Trump Media Technology  vs.  Zedge Inc

Trump Media Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trump Media Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Trump Media is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Zedge Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zedge Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Zedge may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Trump Media and Zedge

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

The idea behind Trump Media Technology and Zedge 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.