Correlation Between Zedge and Hurco Companies

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

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

Diversification Opportunities for Zedge and Hurco Companies

-0.09

Correlation Coefficient

Zedge  Hurco Companies

Good diversification

The 3 months correlation between Zedge and Hurco is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies 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 Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of Zedge i.e., Zedge and Hurco Companies go up and down completely randomly.

Pair Corralation between Zedge and Hurco Companies

Given the investment horizon of 90 days Zedge is expected to generate 1.32 times less return on investment than Hurco Companies. In addition to that, Zedge is 2.0 times more volatile than Hurco Companies. It trades about 0.01 of its total potential returns per unit of risk. Hurco Companies is currently generating about 0.03 per unit of volatility. If you would invest  1,801  in Hurco Companies on September 24, 2024 and sell it today you would earn a total of  119.00  from holding Hurco Companies or generate 6.61% return on investment over 90 days.

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

Zedge Inc  vs.  Hurco Companies

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 inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Hurco Companies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hurco Companies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Hurco Companies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Zedge and Hurco Companies

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

The idea behind Zedge Inc and Hurco Companies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.