Correlation Between Zenvia and Optiva

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

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

Diversification Opportunities for Zenvia and Optiva

-0.31

Correlation Coefficient

Zenvia  Optiva

Very good diversification

The 3 months correlation between Zenvia and Optiva is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Zenvia Inc and Optiva Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optiva Inc 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 Optiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optiva Inc has no effect on the direction of Zenvia i.e., Zenvia and Optiva go up and down completely randomly.

Pair Corralation between Zenvia and Optiva

Given the investment horizon of 90 days Zenvia Inc is expected to generate 0.95 times more return on investment than Optiva. However, Zenvia Inc is 1.06 times less risky than Optiva. It trades about 0.05 of its potential returns per unit of risk. Optiva Inc is currently generating about 0.0 per unit of risk. If you would invest  117.00  in Zenvia Inc on November 19, 2024 and sell it today you would earn a total of  118.00  from holding Zenvia Inc or generate 100.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Zenvia Inc  vs.  Optiva Inc

Zenvia Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zenvia Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Zenvia showed solid returns over the last few months and may actually be approaching a breakup point.

Optiva Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Optiva Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Optiva reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zenvia and Optiva

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

The idea behind Zenvia Inc and Optiva Inc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.