Correlation Between Zscaler and CleanSpark

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

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

Diversification Opportunities for Zscaler and CleanSpark

-0.38

Correlation Coefficient

Zscaler  CleanSpark

Very good diversification

The 3 months correlation between Zscaler and CleanSpark is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Zscaler and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark and Zscaler 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 Zscaler are associated (or correlated) with CleanSpark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanSpark has no effect on the direction of Zscaler i.e., Zscaler and CleanSpark go up and down completely randomly.

Pair Corralation between Zscaler and CleanSpark

Allowing for the 90-day total investment horizon Zscaler is expected to under-perform the CleanSpark. But the stock apears to be less risky and, when comparing its historical volatility, Zscaler is 2.91 times less risky than CleanSpark. The stock trades about -0.06 of its potential returns per unit of risk. The CleanSpark is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,589  in CleanSpark on February 4, 2024 and sell it today you would earn a total of  26.00  from holding CleanSpark or generate 1.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Zscaler  vs.  CleanSpark

Zscaler

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zscaler has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CleanSpark

Risk-Adjusted Performance

12 of 100

Good

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

Pair Trading with Zscaler and CleanSpark

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

The idea behind Zscaler and CleanSpark 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.

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 the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.