Correlation Between Zeta Global and AMSWA Old

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

By analyzing existing cross correlation between Zeta Global Holdings and AMSWA Old, you can compare the effects of market volatilities on Zeta Global and AMSWA Old 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 Zeta Global with a short position of AMSWA Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zeta Global and AMSWA Old.

Diversification Opportunities for Zeta Global and AMSWA Old

-0.65

Correlation Coefficient

Zeta Global  AMSWA Old

Excellent diversification

The 3 months correlation between Zeta and AMSWA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zeta Global Holdings and AMSWA Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMSWA Old and Zeta Global 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 Zeta Global Holdings are associated (or correlated) with AMSWA Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMSWA Old has no effect on the direction of Zeta Global i.e., Zeta Global and AMSWA Old go up and down completely randomly.

Pair Corralation between Zeta Global and AMSWA Old

Given the investment horizon of 90 days Zeta Global Holdings is expected to generate 1.75 times more return on investment than AMSWA Old. However, Zeta Global is 1.75 times more volatile than AMSWA Old. It trades about 0.06 of its potential returns per unit of risk. AMSWA Old is currently generating about -0.01 per unit of risk. If you would invest  821.00  in Zeta Global Holdings on October 9, 2024 and sell it today you would earn a total of  1,077  from holding Zeta Global Holdings or generate 131.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	87.45%
Values	Daily Returns

Zeta Global Holdings  vs.  AMSWA Old

Zeta Global Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zeta Global Holdings 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 somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AMSWA Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMSWA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMSWA Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zeta Global and AMSWA Old

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

The idea behind Zeta Global Holdings and AMSWA Old 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.