Correlation Between ZoomInfo Technologies and Waldencast Acquisition

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

By analyzing existing cross correlation between ZoomInfo Technologies and Waldencast Acquisition Corp, you can compare the effects of market volatilities on ZoomInfo Technologies and Waldencast Acquisition 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 ZoomInfo Technologies with a short position of Waldencast Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZoomInfo Technologies and Waldencast Acquisition.

Diversification Opportunities for ZoomInfo Technologies and Waldencast Acquisition

0.06

Correlation Coefficient

ZoomInfo Technologies  Waldencast Acquisition

Significant diversification

The 3 months correlation between ZoomInfo and Waldencast is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ZoomInfo Technologies and Waldencast Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waldencast Acquisition and ZoomInfo Technologies 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 ZoomInfo Technologies are associated (or correlated) with Waldencast Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waldencast Acquisition has no effect on the direction of ZoomInfo Technologies i.e., ZoomInfo Technologies and Waldencast Acquisition go up and down completely randomly.

Pair Corralation between ZoomInfo Technologies and Waldencast Acquisition

Allowing for the 90-day total investment horizon ZoomInfo Technologies is expected to generate 1.02 times less return on investment than Waldencast Acquisition. But when comparing it to its historical volatility, ZoomInfo Technologies is 1.25 times less risky than Waldencast Acquisition. It trades about 0.06 of its potential returns per unit of risk. Waldencast Acquisition Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  301.00  in Waldencast Acquisition Corp on August 31, 2024 and sell it today you would earn a total of  28.00  from holding Waldencast Acquisition Corp or generate 9.3% return on investment over 90 days.

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

ZoomInfo Technologies  vs.  Waldencast Acquisition Corp

ZoomInfo Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZoomInfo Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, ZoomInfo Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Waldencast Acquisition

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with ZoomInfo Technologies and Waldencast Acquisition

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

The idea behind ZoomInfo Technologies and Waldencast Acquisition Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..