Correlation Between ZenaTech and Avis Budget

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

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

Diversification Opportunities for ZenaTech and Avis Budget

0.38

Correlation Coefficient

ZenaTech  Avis Budget

Weak diversification

The 3 months correlation between ZenaTech and Avis is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ZenaTech and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group and ZenaTech 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 ZenaTech are associated (or correlated) with Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of ZenaTech i.e., ZenaTech and Avis Budget go up and down completely randomly.

Pair Corralation between ZenaTech and Avis Budget

Given the investment horizon of 90 days ZenaTech is expected to under-perform the Avis Budget. In addition to that, ZenaTech is 2.92 times more volatile than Avis Budget Group. It trades about -0.09 of its total potential returns per unit of risk. Avis Budget Group is currently generating about -0.1 per unit of volatility. If you would invest  8,094  in Avis Budget Group on December 19, 2024 and sell it today you would lose (2,004) from holding Avis Budget Group or give up 24.76% of portfolio value over 90 days.

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

ZenaTech  vs.  Avis Budget Group

ZenaTech

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZenaTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Avis Budget Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avis Budget Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ZenaTech and Avis Budget

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

The idea behind ZenaTech and Avis Budget Group 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..