Correlation Between TROOPS and EZFL Old

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

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

Diversification Opportunities for TROOPS and EZFL Old

-0.59

Correlation Coefficient

TROOPS  EZFL Old

Excellent diversification

The 3 months correlation between TROOPS and EZFL is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding TROOPS Inc and EZFL Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZFL Old and TROOPS 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 TROOPS Inc are associated (or correlated) with EZFL Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZFL Old has no effect on the direction of TROOPS i.e., TROOPS and EZFL Old go up and down completely randomly.

Pair Corralation between TROOPS and EZFL Old

Given the investment horizon of 90 days TROOPS Inc is expected to under-perform the EZFL Old. But the stock apears to be less risky and, when comparing its historical volatility, TROOPS Inc is 1.26 times less risky than EZFL Old. The stock trades about -0.19 of its potential returns per unit of risk. The EZFL Old is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  332.00  in EZFL Old on December 28, 2024 and sell it today you would earn a total of  18.00  from holding EZFL Old or generate 5.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	52.46%
Values	Daily Returns

TROOPS Inc  vs.  EZFL Old

TROOPS Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days TROOPS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

EZFL Old

Risk-Adjusted Performance

Insignificant

Over the last 90 days EZFL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite conflicting technical and fundamental indicators, EZFL Old disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TROOPS and EZFL Old

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

The idea behind TROOPS Inc and EZFL Old 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.