Correlation Between Zapata Computing and ASM International

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

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

Diversification Opportunities for Zapata Computing and ASM International

-0.39

Correlation Coefficient

Zapata Computing  ASM International

Very good diversification

The 3 months correlation between Zapata and ASM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zapata Computing Holdings and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International and Zapata Computing 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 Zapata Computing Holdings are associated (or correlated) with ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Zapata Computing i.e., Zapata Computing and ASM International go up and down completely randomly.

Pair Corralation between Zapata Computing and ASM International

If you would invest  4.20  in Zapata Computing Holdings on September 2, 2024 and sell it today you would lose (3.64) from holding Zapata Computing Holdings or give up 86.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Zapata Computing Holdings  vs.  ASM International NV

Zapata Computing Holdings

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Zapata Computing Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Zapata Computing showed solid returns over the last few months and may actually be approaching a breakup point.

ASM International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zapata Computing and ASM International

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

The idea behind Zapata Computing Holdings and ASM International NV 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.