Correlation Between Zillow Group and EnGene Holdings

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Can any of the company-specific risk be diversified away by investing in both Zillow Group and EnGene Holdings 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 Zillow Group and EnGene Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zillow Group Class and enGene Holdings Common, you can compare the effects of market volatilities on Zillow Group and EnGene Holdings 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 Zillow Group with a short position of EnGene Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and EnGene Holdings.

Diversification Opportunities for Zillow Group and EnGene Holdings

-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between Zillow and EnGene is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common and Zillow Group 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 Zillow Group Class are associated (or correlated) with EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Zillow Group i.e., Zillow Group and EnGene Holdings go up and down completely randomly.

Pair Corralation between Zillow Group and EnGene Holdings

Taking into account the 90-day investment horizon Zillow Group is expected to generate 1.72 times less return on investment than EnGene Holdings. But when comparing it to its historical volatility, Zillow Group Class is 2.97 times less risky than EnGene Holdings. It trades about 0.06 of its potential returns per unit of risk. enGene Holdings Common is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  710.00  in enGene Holdings Common on September 20, 2024 and sell it today you would lose (65.00) from holding enGene Holdings Common or give up 9.15% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

Zillow Group Class  vs.  enGene Holdings Common

 Performance 
       Timeline  
Zillow Group Class 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Zillow Group Class are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Zillow Group showed solid returns over the last few months and may actually be approaching a breakup point.
enGene Holdings Common 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in enGene Holdings Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, EnGene Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Zillow Group and EnGene Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Zillow Group and EnGene Holdings

The main advantage of trading using opposite Zillow Group and EnGene Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group position performs unexpectedly, EnGene Holdings 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 EnGene Holdings will offset losses from the drop in EnGene Holdings' long position.
The idea behind Zillow Group Class and enGene Holdings Common 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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