Correlation Between Zumiez and Globalink Investment

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

By analyzing existing cross correlation between Zumiez Inc and Globalink Investment Unit, you can compare the effects of market volatilities on Zumiez and Globalink Investment 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 Globalink Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zumiez and Globalink Investment.

Diversification Opportunities for Zumiez and Globalink Investment

0.05

Correlation Coefficient

Zumiez  Globalink Investment

Significant diversification

The 3 months correlation between Zumiez and Globalink is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Zumiez Inc and Globalink Investment Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalink Investment Unit 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 Globalink Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalink Investment Unit has no effect on the direction of Zumiez i.e., Zumiez and Globalink Investment go up and down completely randomly.

Pair Corralation between Zumiez and Globalink Investment

Given the investment horizon of 90 days Zumiez Inc is expected to under-perform the Globalink Investment. In addition to that, Zumiez is 1.81 times more volatile than Globalink Investment Unit. It trades about -0.11 of its total potential returns per unit of risk. Globalink Investment Unit is currently generating about -0.1 per unit of volatility. If you would invest  1,150  in Globalink Investment Unit on October 25, 2024 and sell it today you would lose (118.00) from holding Globalink Investment Unit or give up 10.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

Zumiez Inc  vs.  Globalink Investment Unit

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.

Globalink Investment Unit

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zumiez and Globalink Investment

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

The idea behind Zumiez Inc and Globalink Investment Unit 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.