Correlation Between Zip Co and Imugene

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

By analyzing existing cross correlation between Zip Co Limited and Imugene, you can compare the effects of market volatilities on Zip Co and Imugene 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 Zip Co with a short position of Imugene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zip Co and Imugene.

Diversification Opportunities for Zip Co and Imugene

0.67

Correlation Coefficient

Zip Co  Imugene

Poor diversification

The 3 months correlation between Zip and Imugene is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zip Co Limited and Imugene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imugene and Zip Co 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 Zip Co Limited are associated (or correlated) with Imugene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imugene has no effect on the direction of Zip Co i.e., Zip Co and Imugene go up and down completely randomly.

Pair Corralation between Zip Co and Imugene

Assuming the 90 days trading horizon Zip Co Limited is expected to under-perform the Imugene. In addition to that, Zip Co is 1.07 times more volatile than Imugene. It trades about -0.15 of its total potential returns per unit of risk. Imugene is currently generating about -0.01 per unit of volatility. If you would invest  3.60  in Imugene on December 29, 2024 and sell it today you would lose (0.30) from holding Imugene or give up 8.33% of portfolio value over 90 days.

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

Zip Co Limited  vs.  Imugene

Zip Co Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zip Co Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Imugene

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imugene has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Imugene is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Zip Co and Imugene

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

The idea behind Zip Co Limited and Imugene 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.