Correlation Between ZEGA Buy and Acruence Active

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

By analyzing existing cross correlation between ZEGA Buy and and Acruence Active Hedge, you can compare the effects of market volatilities on ZEGA Buy and Acruence Active 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 ZEGA Buy with a short position of Acruence Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZEGA Buy and Acruence Active.

Diversification Opportunities for ZEGA Buy and Acruence Active

0.89

Correlation Coefficient

ZEGA Buy  Acruence Active

Very poor diversification

The 3 months correlation between ZEGA and Acruence is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ZEGA Buy and and Acruence Active Hedge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acruence Active Hedge and ZEGA Buy 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 ZEGA Buy and are associated (or correlated) with Acruence Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acruence Active Hedge has no effect on the direction of ZEGA Buy i.e., ZEGA Buy and Acruence Active go up and down completely randomly.

Pair Corralation between ZEGA Buy and Acruence Active

Given the investment horizon of 90 days ZEGA Buy is expected to generate 1.53 times less return on investment than Acruence Active. But when comparing it to its historical volatility, ZEGA Buy and is 2.18 times less risky than Acruence Active. It trades about 0.14 of its potential returns per unit of risk. Acruence Active Hedge is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,012  in Acruence Active Hedge on September 1, 2024 and sell it today you would earn a total of  402.00  from holding Acruence Active Hedge or generate 19.98% return on investment over 90 days.

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

ZEGA Buy and  vs.  Acruence Active Hedge

ZEGA Buy

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ZEGA Buy and are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, ZEGA Buy may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Acruence Active Hedge

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Acruence Active Hedge are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Acruence Active disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZEGA Buy and Acruence Active

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

The idea behind ZEGA Buy and and Acruence Active Hedge 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.