Correlation Between Zumiez and Conduit Pharmaceuticals

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

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

Diversification Opportunities for Zumiez and Conduit Pharmaceuticals

0.59

Correlation Coefficient

Zumiez  Conduit Pharmaceuticals

Very weak diversification

The 3 months correlation between Zumiez and Conduit is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Zumiez Inc and Conduit Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conduit Pharmaceuticals and Zumiez 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 Zumiez Inc are associated (or correlated) with Conduit Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conduit Pharmaceuticals has no effect on the direction of Zumiez i.e., Zumiez and Conduit Pharmaceuticals go up and down completely randomly.

Pair Corralation between Zumiez and Conduit Pharmaceuticals

Given the investment horizon of 90 days Zumiez Inc is expected to under-perform the Conduit Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Zumiez Inc is 4.68 times less risky than Conduit Pharmaceuticals. The stock trades about -0.21 of its potential returns per unit of risk. The Conduit Pharmaceuticals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  9.40  in Conduit Pharmaceuticals on October 11, 2024 and sell it today you would lose (1.20) from holding Conduit Pharmaceuticals or give up 12.77% of portfolio value over 90 days.

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

Zumiez Inc  vs.  Conduit Pharmaceuticals

Zumiez Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zumiez Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Conduit Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conduit Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Zumiez and Conduit Pharmaceuticals

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

The idea behind Zumiez Inc and Conduit Pharmaceuticals 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.