Correlation Between Zenvia and Glimpse

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

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

Diversification Opportunities for Zenvia and Glimpse

0.65

Correlation Coefficient

Zenvia  Glimpse

Poor diversification

The 3 months correlation between Zenvia and Glimpse is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zenvia Inc and Glimpse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glimpse Group and Zenvia 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 Zenvia Inc are associated (or correlated) with Glimpse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glimpse Group has no effect on the direction of Zenvia i.e., Zenvia and Glimpse go up and down completely randomly.

Pair Corralation between Zenvia and Glimpse

Given the investment horizon of 90 days Zenvia Inc is expected to generate 0.83 times more return on investment than Glimpse. However, Zenvia Inc is 1.2 times less risky than Glimpse. It trades about 0.01 of its potential returns per unit of risk. Glimpse Group is currently generating about -0.04 per unit of risk. If you would invest  171.00  in Zenvia Inc on September 1, 2024 and sell it today you would lose (7.00) from holding Zenvia Inc or give up 4.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Zenvia Inc  vs.  Glimpse Group

Zenvia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Glimpse Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glimpse Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Zenvia and Glimpse

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

The idea behind Zenvia Inc and Glimpse Group 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.