Correlation Between ZOOZ Power and Pet Acquisition

Can any of the company-specific risk be diversified away by investing in both ZOOZ Power and Pet 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 ZOOZ Power and Pet Acquisition 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 Pet Acquisition LLC, you can compare the effects of market volatilities on ZOOZ Power and Pet 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 ZOOZ Power with a short position of Pet Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZOOZ Power and Pet Acquisition.

Diversification Opportunities for ZOOZ Power and Pet Acquisition

-0.18

Correlation Coefficient

ZOOZ Power  Pet Acquisition

Good diversification

The 3 months correlation between ZOOZ and Pet is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ZOOZ Power Ltd and Pet Acquisition LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pet Acquisition LLC 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 Pet Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pet Acquisition LLC has no effect on the direction of ZOOZ Power i.e., ZOOZ Power and Pet Acquisition go up and down completely randomly.

Pair Corralation between ZOOZ Power and Pet Acquisition

Given the investment horizon of 90 days ZOOZ Power Ltd is expected to under-perform the Pet Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, ZOOZ Power Ltd is 1.24 times less risky than Pet Acquisition. The stock trades about -0.03 of its potential returns per unit of risk. The Pet Acquisition LLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  362.00  in Pet Acquisition LLC on September 28, 2024 and sell it today you would earn a total of  40.00  from holding Pet Acquisition LLC or generate 11.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.77%
Values	Daily Returns

ZOOZ Power Ltd  vs.  Pet Acquisition LLC

ZOOZ Power

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pet Acquisition LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pet Acquisition LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pet Acquisition is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ZOOZ Power and Pet Acquisition

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

The idea behind ZOOZ Power Ltd and Pet Acquisition LLC 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.