Correlation Between ZOOZ Power and SCHMID Group

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

By analyzing existing cross correlation between ZOOZ Power Ltd and SCHMID Group NV, you can compare the effects of market volatilities on ZOOZ Power and SCHMID Group 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 ZOOZ Power with a short position of SCHMID Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZOOZ Power and SCHMID Group.

Diversification Opportunities for ZOOZ Power and SCHMID Group

-0.21

Correlation Coefficient

ZOOZ Power  SCHMID Group

Very good diversification

The 3 months correlation between ZOOZ and SCHMID is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ZOOZ Power Ltd and SCHMID Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHMID Group NV and ZOOZ Power 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 ZOOZ Power Ltd are associated (or correlated) with SCHMID Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHMID Group NV has no effect on the direction of ZOOZ Power i.e., ZOOZ Power and SCHMID Group go up and down completely randomly.

Pair Corralation between ZOOZ Power and SCHMID Group

Given the investment horizon of 90 days ZOOZ Power Ltd is expected to under-perform the SCHMID Group. But the stock apears to be less risky and, when comparing its historical volatility, ZOOZ Power Ltd is 4.09 times less risky than SCHMID Group. The stock trades about -0.18 of its potential returns per unit of risk. The SCHMID Group NV is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  22.00  in SCHMID Group NV on September 27, 2024 and sell it today you would earn a total of  6.00  from holding SCHMID Group NV or generate 27.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

ZOOZ Power Ltd  vs.  SCHMID Group NV

ZOOZ Power

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

SCHMID Group NV

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SCHMID Group NV are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, SCHMID Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZOOZ Power and SCHMID Group

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

The idea behind ZOOZ Power Ltd and SCHMID Group NV 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 Stocks Directory module to find actively traded stocks across global markets.