Correlation Between ReposiTrak and Zumiez

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

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

Diversification Opportunities for ReposiTrak and Zumiez

-0.02

Correlation Coefficient

ReposiTrak  Zumiez

Good diversification

The 3 months correlation between ReposiTrak and Zumiez is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ReposiTrak and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc and ReposiTrak 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 ReposiTrak 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 ReposiTrak i.e., ReposiTrak and Zumiez go up and down completely randomly.

Pair Corralation between ReposiTrak and Zumiez

Given the investment horizon of 90 days ReposiTrak is expected to generate 0.67 times more return on investment than Zumiez. However, ReposiTrak is 1.48 times less risky than Zumiez. It trades about 0.08 of its potential returns per unit of risk. Zumiez Inc is currently generating about -0.11 per unit of risk. If you would invest  1,938  in ReposiTrak on October 24, 2024 and sell it today you would earn a total of  223.00  from holding ReposiTrak or generate 11.51% return on investment over 90 days.

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

ReposiTrak  vs.  Zumiez Inc

ReposiTrak

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ReposiTrak are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, ReposiTrak disclosed 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 inconsistent performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ReposiTrak and Zumiez

The main advantage of trading using opposite ReposiTrak and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReposiTrak 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 ReposiTrak 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.