Correlation Between Zvelo and SPO Global

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

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

Diversification Opportunities for Zvelo and SPO Global

-0.56

Correlation Coefficient

Zvelo  SPO Global

Excellent diversification

The 3 months correlation between Zvelo and SPO is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding zvelo Inc and SPO Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPO Global and Zvelo 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 zvelo Inc are associated (or correlated) with SPO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPO Global has no effect on the direction of Zvelo i.e., Zvelo and SPO Global go up and down completely randomly.

Pair Corralation between Zvelo and SPO Global

Given the investment horizon of 90 days zvelo Inc is expected to under-perform the SPO Global. But the pink sheet apears to be less risky and, when comparing its historical volatility, zvelo Inc is 2.28 times less risky than SPO Global. The pink sheet trades about -0.03 of its potential returns per unit of risk. The SPO Global is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.11  in SPO Global on February 5, 2024 and sell it today you would earn a total of  0.03  from holding SPO Global or generate 27.27% return on investment over 90 days.

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

zvelo Inc  vs.  SPO Global

zvelo Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in zvelo Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Zvelo displayed solid returns over the last few months and may actually be approaching a breakup point.

SPO Global

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPO Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, SPO Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zvelo and SPO Global

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

The idea behind zvelo Inc and SPO Global 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.