Correlation Between Zurn Elkay and SavMobi Technology

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

By analyzing existing cross correlation between Zurn Elkay Water and SavMobi Technology, you can compare the effects of market volatilities on Zurn Elkay and SavMobi Technology 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 Zurn Elkay with a short position of SavMobi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurn Elkay and SavMobi Technology.

Diversification Opportunities for Zurn Elkay and SavMobi Technology

-0.32

Correlation Coefficient

Zurn Elkay  SavMobi Technology

Very good diversification

The 3 months correlation between Zurn and SavMobi is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Zurn Elkay Water and SavMobi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SavMobi Technology and Zurn Elkay 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 Zurn Elkay Water are associated (or correlated) with SavMobi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SavMobi Technology has no effect on the direction of Zurn Elkay i.e., Zurn Elkay and SavMobi Technology go up and down completely randomly.

Pair Corralation between Zurn Elkay and SavMobi Technology

Considering the 90-day investment horizon Zurn Elkay Water is expected to under-perform the SavMobi Technology. But the stock apears to be less risky and, when comparing its historical volatility, Zurn Elkay Water is 10.04 times less risky than SavMobi Technology. The stock trades about -0.2 of its potential returns per unit of risk. The SavMobi Technology is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  200.00  in SavMobi Technology on September 30, 2024 and sell it today you would earn a total of  63.00  from holding SavMobi Technology or generate 31.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Zurn Elkay Water  vs.  SavMobi Technology

Zurn Elkay Water

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zurn Elkay Water are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Zurn Elkay is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

SavMobi Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SavMobi Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, SavMobi Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zurn Elkay and SavMobi Technology

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

The idea behind Zurn Elkay Water and SavMobi Technology 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.