Correlation Between Starbucks and ZOOZ Power

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

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

Diversification Opportunities for Starbucks and ZOOZ Power

0.41

Correlation Coefficient

Starbucks  ZOOZ Power

Very weak diversification

The 3 months correlation between Starbucks and ZOOZ is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Starbucks and ZOOZ Power Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOOZ Power and Starbucks 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 Starbucks are associated (or correlated) with ZOOZ Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZOOZ Power has no effect on the direction of Starbucks i.e., Starbucks and ZOOZ Power go up and down completely randomly.

Pair Corralation between Starbucks and ZOOZ Power

Given the investment horizon of 90 days Starbucks is expected to generate 0.42 times more return on investment than ZOOZ Power. However, Starbucks is 2.37 times less risky than ZOOZ Power. It trades about -0.03 of its potential returns per unit of risk. ZOOZ Power Ltd is currently generating about -0.02 per unit of risk. If you would invest  9,496  in Starbucks on October 11, 2024 and sell it today you would lose (236.00) from holding Starbucks or give up 2.49% of portfolio value over 90 days.

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

Starbucks  vs.  ZOOZ Power Ltd

Starbucks

Risk-Adjusted Performance

0 of 100

Very Weak

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

ZOOZ Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZOOZ Power Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ZOOZ Power is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Starbucks and ZOOZ Power

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

The idea behind Starbucks and ZOOZ Power Ltd 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.