Correlation Between Zenvia and St James

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

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

Diversification Opportunities for Zenvia and St James

-0.37

Correlation Coefficient

Zenvia  St James

Very good diversification

The 3 months correlation between Zenvia and LRDJF is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Zenvia Inc and St James Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St James Gold and Zenvia 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 Zenvia Inc are associated (or correlated) with St James. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St James Gold has no effect on the direction of Zenvia i.e., Zenvia and St James go up and down completely randomly.

Pair Corralation between Zenvia and St James

Given the investment horizon of 90 days Zenvia Inc is expected to generate 0.8 times more return on investment than St James. However, Zenvia Inc is 1.25 times less risky than St James. It trades about 0.05 of its potential returns per unit of risk. St James Gold is currently generating about 0.02 per unit of risk. If you would invest  107.00  in Zenvia Inc on September 23, 2024 and sell it today you would earn a total of  55.00  from holding Zenvia Inc or generate 51.4% return on investment over 90 days.

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

Zenvia Inc  vs.  St James Gold

Zenvia Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zenvia Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Zenvia showed solid returns over the last few months and may actually be approaching a breakup point.

St James Gold

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in St James Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, St James reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zenvia and St James

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

The idea behind Zenvia Inc and St James Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.