Correlation Between ZEGA Buy and Altus Power

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

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

Diversification Opportunities for ZEGA Buy and Altus Power

-0.43

Correlation Coefficient

ZEGA Buy  Altus Power

Very good diversification

The 3 months correlation between ZEGA and Altus is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ZEGA Buy and and Altus Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Power and ZEGA Buy 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 ZEGA Buy and are associated (or correlated) with Altus Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Power has no effect on the direction of ZEGA Buy i.e., ZEGA Buy and Altus Power go up and down completely randomly.

Pair Corralation between ZEGA Buy and Altus Power

Given the investment horizon of 90 days ZEGA Buy and is expected to generate 0.15 times more return on investment than Altus Power. However, ZEGA Buy and is 6.84 times less risky than Altus Power. It trades about -0.14 of its potential returns per unit of risk. Altus Power is currently generating about -0.21 per unit of risk. If you would invest  1,848  in ZEGA Buy and on January 18, 2024 and sell it today you would lose (34.00) from holding ZEGA Buy and or give up 1.84% of portfolio value over 90 days.

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

ZEGA Buy and  vs.  Altus Power

ZEGA Buy

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZEGA Buy and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, ZEGA Buy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Altus Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altus Power 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 Etf's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with ZEGA Buy and Altus Power

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

The idea behind ZEGA Buy and and Altus Power 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.