Correlation Between DZS and Excel Corp

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

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

Diversification Opportunities for DZS and Excel Corp

0.4

Correlation Coefficient

DZS  Excel Corp

Very weak diversification

The 3 months correlation between DZS and Excel is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding DZS Inc and Excel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excel Corp and DZS 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 DZS Inc are associated (or correlated) with Excel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excel Corp has no effect on the direction of DZS i.e., DZS and Excel Corp go up and down completely randomly.

Pair Corralation between DZS and Excel Corp

Given the investment horizon of 90 days DZS Inc is expected to generate 0.83 times more return on investment than Excel Corp. However, DZS Inc is 1.2 times less risky than Excel Corp. It trades about -0.06 of its potential returns per unit of risk. Excel Corp is currently generating about -0.08 per unit of risk. If you would invest  1,284  in DZS Inc on January 26, 2024 and sell it today you would lose (1,171) from holding DZS Inc or give up 91.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

DZS Inc  vs.  Excel Corp

DZS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DZS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Excel Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Excel Corp 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 fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with DZS and Excel Corp

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

The idea behind DZS Inc and Excel Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.