Correlation Between Shift4 Payments and Zapata Computing

Can any of the company-specific risk be diversified away by investing in both Shift4 Payments and Zapata Computing 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 Shift4 Payments and Zapata Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shift4 Payments and Zapata Computing Holdings, you can compare the effects of market volatilities on Shift4 Payments and Zapata Computing 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 Shift4 Payments with a short position of Zapata Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shift4 Payments and Zapata Computing.

Diversification Opportunities for Shift4 Payments and Zapata Computing

0.0

Correlation Coefficient

Shift4 Payments  Zapata Computing

Pay attention - limited upside

The 3 months correlation between Shift4 and Zapata is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shift4 Payments and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings and Shift4 Payments 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 Shift4 Payments are associated (or correlated) with Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of Shift4 Payments i.e., Shift4 Payments and Zapata Computing go up and down completely randomly.

Pair Corralation between Shift4 Payments and Zapata Computing

If you would invest (100.00) in Zapata Computing Holdings on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Zapata Computing Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shift4 Payments  vs.  Zapata Computing Holdings

Shift4 Payments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shift4 Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Zapata Computing Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zapata Computing Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Zapata Computing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Shift4 Payments and Zapata Computing

The main advantage of trading using opposite Shift4 Payments and Zapata Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shift4 Payments position performs unexpectedly, Zapata Computing 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 Zapata Computing will offset losses from the drop in Zapata Computing's long position.

The idea behind Shift4 Payments and Zapata Computing Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.