Correlation Between 49326EEN9 and Zumiez

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Can any of the company-specific risk be diversified away by investing in both 49326EEN9 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 49326EEN9 and Zumiez into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KEY 4789 01 JUN 33 and Zumiez Inc, you can compare the effects of market volatilities on 49326EEN9 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 49326EEN9 with a short position of Zumiez. Check out your portfolio center. Please also check ongoing floating volatility patterns of 49326EEN9 and Zumiez.

Diversification Opportunities for 49326EEN9 and Zumiez

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 49326EEN9 and Zumiez is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding KEY 4789 01 JUN 33 and Zumiez Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zumiez Inc and 49326EEN9 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 KEY 4789 01 JUN 33 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 49326EEN9 i.e., 49326EEN9 and Zumiez go up and down completely randomly.

Pair Corralation between 49326EEN9 and Zumiez

Assuming the 90 days trading horizon KEY 4789 01 JUN 33 is expected to generate 0.17 times more return on investment than Zumiez. However, KEY 4789 01 JUN 33 is 5.92 times less risky than Zumiez. It trades about 0.13 of its potential returns per unit of risk. Zumiez Inc is currently generating about -0.17 per unit of risk. If you would invest  9,522  in KEY 4789 01 JUN 33 on September 23, 2024 and sell it today you would earn a total of  206.00  from holding KEY 4789 01 JUN 33 or generate 2.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

KEY 4789 01 JUN 33  vs.  Zumiez Inc

 Performance 
       Timeline  
KEY 4789 01 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days KEY 4789 01 JUN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 49326EEN9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Zumiez Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 unfluctuating 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.

49326EEN9 and Zumiez Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 49326EEN9 and Zumiez

The main advantage of trading using opposite 49326EEN9 and Zumiez positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 49326EEN9 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 KEY 4789 01 JUN 33 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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