Correlation Between Zoomd Technologies and CarsalesCom

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

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

Diversification Opportunities for Zoomd Technologies and CarsalesCom

0.65

Correlation Coefficient

Zoomd Technologies  CarsalesCom

Poor diversification

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

Pair Corralation between Zoomd Technologies and CarsalesCom

Assuming the 90 days horizon Zoomd Technologies is expected to generate 3.1 times more return on investment than CarsalesCom. However, Zoomd Technologies is 3.1 times more volatile than CarsalesCom Ltd ADR. It trades about 0.16 of its potential returns per unit of risk. CarsalesCom Ltd ADR is currently generating about 0.07 per unit of risk. If you would invest  32.00  in Zoomd Technologies on September 24, 2024 and sell it today you would earn a total of  24.00  from holding Zoomd Technologies or generate 75.0% return on investment over 90 days.

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

Zoomd Technologies  vs.  CarsalesCom Ltd ADR

Zoomd Technologies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zoomd Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Zoomd Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

CarsalesCom ADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CarsalesCom Ltd ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, CarsalesCom may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Zoomd Technologies and CarsalesCom

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

The idea behind Zoomd Technologies and CarsalesCom Ltd ADR 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.