Correlation Between A10 Network and ZeroFox Holdings

Can any of the company-specific risk be diversified away by investing in both A10 Network and ZeroFox Holdings 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 A10 Network and ZeroFox Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A10 Network and ZeroFox Holdings, you can compare the effects of market volatilities on A10 Network and ZeroFox Holdings 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 A10 Network with a short position of ZeroFox Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of A10 Network and ZeroFox Holdings.

Diversification Opportunities for A10 Network and ZeroFox Holdings

0.66

Correlation Coefficient

A10 Network  ZeroFox Holdings

Poor diversification

The 3 months correlation between A10 and ZeroFox is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding A10 Network and ZeroFox Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZeroFox Holdings and A10 Network 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 A10 Network are associated (or correlated) with ZeroFox Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZeroFox Holdings has no effect on the direction of A10 Network i.e., A10 Network and ZeroFox Holdings go up and down completely randomly.

Pair Corralation between A10 Network and ZeroFox Holdings

Given the investment horizon of 90 days A10 Network is expected to generate 0.37 times more return on investment than ZeroFox Holdings. However, A10 Network is 2.69 times less risky than ZeroFox Holdings. It trades about 0.02 of its potential returns per unit of risk. ZeroFox Holdings is currently generating about -0.04 per unit of risk. If you would invest  1,333  in A10 Network on March 8, 2024 and sell it today you would earn a total of  123.00  from holding A10 Network or generate 9.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.96%
Values	Daily Returns

A10 Network  vs.  ZeroFox Holdings

A10 Network

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in A10 Network are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, A10 Network may actually be approaching a critical reversion point that can send shares even higher in July 2024.

ZeroFox Holdings

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with A10 Network and ZeroFox Holdings

The main advantage of trading using opposite A10 Network and ZeroFox Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A10 Network position performs unexpectedly, ZeroFox Holdings 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 ZeroFox Holdings will offset losses from the drop in ZeroFox Holdings' long position.

The idea behind A10 Network and ZeroFox Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.