Correlation Between Zenvia and Splitit Payments

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

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

Diversification Opportunities for Zenvia and Splitit Payments

0.08

Correlation Coefficient

Zenvia  Splitit Payments

Significant diversification

The 3 months correlation between Zenvia and Splitit is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Zenvia Inc and Splitit Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Splitit Payments 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 Splitit Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Splitit Payments has no effect on the direction of Zenvia i.e., Zenvia and Splitit Payments go up and down completely randomly.

Pair Corralation between Zenvia and Splitit Payments

Given the investment horizon of 90 days Zenvia is expected to generate 13.81 times less return on investment than Splitit Payments. But when comparing it to its historical volatility, Zenvia Inc is 9.57 times less risky than Splitit Payments. It trades about 0.04 of its potential returns per unit of risk. Splitit Payments is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Splitit Payments on September 23, 2024 and sell it today you would lose (10.00) from holding Splitit Payments or give up 100.0% of portfolio value over 90 days.

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

Zenvia Inc  vs.  Splitit Payments

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.

Splitit Payments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Splitit Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Zenvia and Splitit Payments

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

The idea behind Zenvia Inc and Splitit Payments 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.