Correlation Between Zapata Computing and Corpay

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

By analyzing existing cross correlation between Zapata Computing Holdings and Corpay Inc, you can compare the effects of market volatilities on Zapata Computing and Corpay 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 Zapata Computing with a short position of Corpay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zapata Computing and Corpay.

Diversification Opportunities for Zapata Computing and Corpay

-0.6

Correlation Coefficient

Zapata Computing  Corpay

Excellent diversification

The 3 months correlation between Zapata and Corpay is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zapata Computing Holdings and Corpay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corpay Inc and Zapata Computing 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 Zapata Computing Holdings are associated (or correlated) with Corpay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corpay Inc has no effect on the direction of Zapata Computing i.e., Zapata Computing and Corpay go up and down completely randomly.

Pair Corralation between Zapata Computing and Corpay

Assuming the 90 days horizon Zapata Computing Holdings is expected to generate 105.08 times more return on investment than Corpay. However, Zapata Computing is 105.08 times more volatile than Corpay Inc. It trades about 0.28 of its potential returns per unit of risk. Corpay Inc is currently generating about -0.01 per unit of risk. If you would invest  0.30  in Zapata Computing Holdings on September 22, 2024 and sell it today you would earn a total of  0.26  from holding Zapata Computing Holdings or generate 86.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	23.26%
Values	Daily Returns

Zapata Computing Holdings  vs.  Corpay Inc

Zapata Computing Holdings

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Zapata Computing Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Zapata Computing showed solid returns over the last few months and may actually be approaching a breakup point.

Corpay Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corpay Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Corpay may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Zapata Computing and Corpay

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

The idea behind Zapata Computing Holdings and Corpay Inc 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 CEOs Directory module to screen CEOs from public companies around the world.