Correlation Between Ironnet and ZeroFox Holdings

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

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

Diversification Opportunities for Ironnet and ZeroFox Holdings

-0.53

Correlation Coefficient

Ironnet  ZeroFox Holdings

Excellent diversification

The 3 months correlation between Ironnet and ZeroFox is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ironnet and ZeroFox Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZeroFox Holdings and Ironnet 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 Ironnet are associated (or correlated) with ZeroFox Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZeroFox Holdings has no effect on the direction of Ironnet i.e., Ironnet and ZeroFox Holdings go up and down completely randomly.

Pair Corralation between Ironnet and ZeroFox Holdings

If you would invest  118.00  in ZeroFox Holdings on September 1, 2024 and sell it today you would earn a total of  0.00  from holding ZeroFox Holdings or generate 0.0% return on investment over 90 days.

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

Ironnet  vs.  ZeroFox Holdings

Ironnet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ironnet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ironnet is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ZeroFox Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZeroFox Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, ZeroFox Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ironnet and ZeroFox Holdings

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

The idea behind Ironnet and ZeroFox Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.