Correlation Between Global E and Ziff Davis

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

By analyzing existing cross correlation between Global E Online and Ziff Davis, you can compare the effects of market volatilities on Global E and Ziff Davis 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 Global E with a short position of Ziff Davis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Ziff Davis.

Diversification Opportunities for Global E and Ziff Davis

0.81

Correlation Coefficient

Global E  Ziff Davis

Very poor diversification

The 3 months correlation between Global and Ziff is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Ziff Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ziff Davis and Global E 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 Global E Online are associated (or correlated) with Ziff Davis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ziff Davis has no effect on the direction of Global E i.e., Global E and Ziff Davis go up and down completely randomly.

Pair Corralation between Global E and Ziff Davis

Given the investment horizon of 90 days Global E Online is expected to generate 1.11 times more return on investment than Ziff Davis. However, Global E is 1.11 times more volatile than Ziff Davis. It trades about -0.15 of its potential returns per unit of risk. Ziff Davis is currently generating about -0.41 per unit of risk. If you would invest  5,548  in Global E Online on October 12, 2024 and sell it today you would lose (270.00) from holding Global E Online or give up 4.87% of portfolio value over 90 days.

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

Global E Online  vs.  Ziff Davis

Global E Online

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Global E exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ziff Davis

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ziff Davis are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Ziff Davis exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global E and Ziff Davis

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

The idea behind Global E Online and Ziff Davis 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.