Correlation Between TruBridge and Zedge

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

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

Diversification Opportunities for TruBridge and Zedge

-0.25

Correlation Coefficient

TruBridge  Zedge

Very good diversification

The 3 months correlation between TruBridge and Zedge is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding TruBridge and Zedge Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedge Inc and TruBridge 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 TruBridge 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 TruBridge i.e., TruBridge and Zedge go up and down completely randomly.

Pair Corralation between TruBridge and Zedge

Given the investment horizon of 90 days TruBridge is expected to generate 0.71 times more return on investment than Zedge. However, TruBridge is 1.4 times less risky than Zedge. It trades about 0.24 of its potential returns per unit of risk. Zedge Inc is currently generating about -0.05 per unit of risk. If you would invest  1,902  in TruBridge on December 26, 2024 and sell it today you would earn a total of  868.00  from holding TruBridge or generate 45.64% return on investment over 90 days.

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

TruBridge  vs.  Zedge Inc

TruBridge

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TruBridge are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, TruBridge reported solid returns over the last few months and may actually be approaching a breakup point.

Zedge Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zedge Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with TruBridge and Zedge

The main advantage of trading using opposite TruBridge and Zedge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TruBridge 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 TruBridge 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.