Correlation Between Plus500 and Zendesk

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Can any of the company-specific risk be diversified away by investing in both Plus500 and Zendesk 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 Plus500 and Zendesk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plus500 and Zendesk, you can compare the effects of market volatilities on Plus500 and Zendesk 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 Plus500 with a short position of Zendesk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plus500 and Zendesk.

Diversification Opportunities for Plus500 and Zendesk

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Plus500 and Zendesk is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Plus500 and Zendesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zendesk and Plus500 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 Plus500 are associated (or correlated) with Zendesk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zendesk has no effect on the direction of Plus500 i.e., Plus500 and Zendesk go up and down completely randomly.

Pair Corralation between Plus500 and Zendesk

Assuming the 90 days horizon Plus500 is expected to generate 0.33 times more return on investment than Zendesk. However, Plus500 is 3.07 times less risky than Zendesk. It trades about 0.0 of its potential returns per unit of risk. Zendesk is currently generating about -0.06 per unit of risk. If you would invest  1,982  in Plus500 on May 14, 2022 and sell it today you would lose (24.00)  from holding Plus500 or give up 1.21% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.2%
ValuesDaily Returns

Plus500  vs.  Zendesk

 Performance (%) 
       Timeline  
Plus500 
Plus500 Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Plus500 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Plus500 may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Plus500 Price Channel

Zendesk 
Zendesk Performance
0 of 100
Over the last 90 days Zendesk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in September 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Zendesk Price Channel

Plus500 and Zendesk Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Plus500 and Zendesk

The main advantage of trading using opposite Plus500 and Zendesk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plus500 position performs unexpectedly, Zendesk 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 Zendesk will offset losses from the drop in Zendesk's long position.

Plus500

Pair trading matchups for Plus500

The idea behind Plus500 and Zendesk 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.

Zendesk

Pair trading matchups for Zendesk

Check out your portfolio center. 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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