Correlation Between ZB and Maker
Can any of the company-specific risk be diversified away by investing in both ZB and Maker 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 ZB and Maker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZB and Maker, you can compare the effects of market volatilities on ZB and Maker 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 ZB with a short position of Maker. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZB and Maker.
Diversification Opportunities for ZB and Maker
Significant diversification
The 3 months correlation between ZB and Maker is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ZB and Maker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maker and ZB 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 ZB are associated (or correlated) with Maker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maker has no effect on the direction of ZB i.e., ZB and Maker go up and down completely randomly.
Pair Corralation between ZB and Maker
If you would invest 44.00 in ZB on January 25, 2024 and sell it today you would earn a total of 0.00 from holding ZB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
ZB vs. Maker
Performance |
| Timeline |
| ZB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Maker |
ZB and Maker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZB and Maker
The main advantage of trading using opposite ZB and Maker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZB position performs unexpectedly, Maker 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 Maker will offset losses from the drop in Maker's long position.The idea behind ZB and Maker 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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |