Correlation Between Go Solar and Zumiez

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

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

Diversification Opportunities for Go Solar and Zumiez

0.0

Correlation Coefficient

Go Solar  Zumiez

Pay attention - limited upside

The 3 months correlation between GSLO and Zumiez is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Go Solar USA and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc and Go Solar 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 Go Solar USA 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 Go Solar i.e., Go Solar and Zumiez go up and down completely randomly.

Pair Corralation between Go Solar and Zumiez

Given the investment horizon of 90 days Go Solar USA is expected to generate 37.09 times more return on investment than Zumiez. However, Go Solar is 37.09 times more volatile than Zumiez Inc. It trades about 0.13 of its potential returns per unit of risk. Zumiez Inc is currently generating about -0.06 per unit of risk. If you would invest  0.00  in Go Solar USA on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Go Solar USA or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Go Solar USA  vs.  Zumiez Inc

Go Solar USA

Risk-Adjusted Performance

9 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Go Solar USA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Go Solar displayed solid returns over the last few months and may actually be approaching a breakup point.

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 inconsistent 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 Go Solar and Zumiez

The main advantage of trading using opposite Go Solar and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Go Solar 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 Go Solar USA 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.