Correlation Between Zedge and BitFuFu Warrant

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

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

Diversification Opportunities for Zedge and BitFuFu Warrant

-0.6

Correlation Coefficient

Zedge  BitFuFu Warrant

Excellent diversification

The 3 months correlation between Zedge and BitFuFu is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc and BitFuFu Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Warrant and Zedge 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 Zedge Inc are associated (or correlated) with BitFuFu Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Warrant has no effect on the direction of Zedge i.e., Zedge and BitFuFu Warrant go up and down completely randomly.

Pair Corralation between Zedge and BitFuFu Warrant

Given the investment horizon of 90 days Zedge Inc is expected to generate 1.57 times more return on investment than BitFuFu Warrant. However, Zedge is 1.57 times more volatile than BitFuFu Warrant. It trades about 0.11 of its potential returns per unit of risk. BitFuFu Warrant is currently generating about -0.03 per unit of risk. If you would invest  236.00  in Zedge Inc on October 21, 2024 and sell it today you would earn a total of  33.00  from holding Zedge Inc or generate 13.98% return on investment over 90 days.

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

Zedge Inc  vs.  BitFuFu Warrant

Zedge Inc

Risk-Adjusted Performance

0 of 100

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 rather sound technical and fundamental indicators, Zedge is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

BitFuFu Warrant

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Warrant are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, BitFuFu Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zedge and BitFuFu Warrant

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

The idea behind Zedge Inc and BitFuFu Warrant 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.