Correlation Between Zynga and Activision Blizzard
Can any of the company-specific risk be diversified away by investing in both Zynga and Activision Blizzard 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 Zynga and Activision Blizzard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zynga Inc and Activision Blizzard, you can compare the effects of market volatilities on Zynga and Activision Blizzard 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 Zynga with a short position of Activision Blizzard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zynga and Activision Blizzard.
Diversification Opportunities for Zynga and Activision Blizzard
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zynga and Activision is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Zynga Inc and Activision Blizzard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Activision Blizzard and Zynga 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 Zynga Inc are associated (or correlated) with Activision Blizzard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Activision Blizzard has no effect on the direction of Zynga i.e., Zynga and Activision Blizzard go up and down completely randomly.
Pair Corralation between Zynga and Activision Blizzard
If you would invest 8,581 in Activision Blizzard on January 20, 2024 and sell it today you would earn a total of 861.00 from holding Activision Blizzard or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.83% |
| Values | Daily Returns |
Zynga Inc vs. Activision Blizzard
Performance |
| Timeline |
| Zynga Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Activision Blizzard |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zynga and Activision Blizzard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zynga and Activision Blizzard
The main advantage of trading using opposite Zynga and Activision Blizzard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zynga position performs unexpectedly, Activision Blizzard 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 Activision Blizzard will offset losses from the drop in Activision Blizzard's long position.| Zynga vs. SBM Offshore NV | Zynga vs. Avarone Metals | Zynga vs. Golden Energy Offshore | Zynga vs. Seche Environnement SA |
| Activision Blizzard vs. Take Two Interactive Software | Activision Blizzard vs. Nintendo Co ADR | Activision Blizzard vs. NetEase | Activision Blizzard vs. Playtika Holding Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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