Correlation Between ZOOZ Power and Nuvve Holding

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

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

Diversification Opportunities for ZOOZ Power and Nuvve Holding

-0.7

Correlation Coefficient

ZOOZ Power  Nuvve Holding

Excellent diversification

The 3 months correlation between ZOOZ and Nuvve is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ZOOZ Power Ltd and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp and ZOOZ Power 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 ZOOZ Power Ltd are associated (or correlated) with Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of ZOOZ Power i.e., ZOOZ Power and Nuvve Holding go up and down completely randomly.

Pair Corralation between ZOOZ Power and Nuvve Holding

Given the investment horizon of 90 days ZOOZ Power Ltd is expected to generate 0.47 times more return on investment than Nuvve Holding. However, ZOOZ Power Ltd is 2.11 times less risky than Nuvve Holding. It trades about -0.01 of its potential returns per unit of risk. Nuvve Holding Corp is currently generating about -0.03 per unit of risk. If you would invest  410.00  in ZOOZ Power Ltd on September 3, 2024 and sell it today you would lose (112.00) from holding ZOOZ Power Ltd or give up 27.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	33.74%
Values	Daily Returns

ZOOZ Power Ltd  vs.  Nuvve Holding Corp

ZOOZ Power

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nuvve Holding is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ZOOZ Power and Nuvve Holding

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

The idea behind ZOOZ Power Ltd and Nuvve Holding 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.