Correlation Between Cloudflare and ZenaTech

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

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

Diversification Opportunities for Cloudflare and ZenaTech

0.76

Correlation Coefficient

Cloudflare  ZenaTech

Poor diversification

The 3 months correlation between Cloudflare and ZenaTech is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cloudflare and ZenaTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZenaTech and Cloudflare 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 Cloudflare are associated (or correlated) with ZenaTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZenaTech has no effect on the direction of Cloudflare i.e., Cloudflare and ZenaTech go up and down completely randomly.

Pair Corralation between Cloudflare and ZenaTech

Considering the 90-day investment horizon Cloudflare is expected to generate 1.92 times less return on investment than ZenaTech. But when comparing it to its historical volatility, Cloudflare is 3.54 times less risky than ZenaTech. It trades about 0.34 of its potential returns per unit of risk. ZenaTech is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  260.00  in ZenaTech on April 24, 2025 and sell it today you would earn a total of  289.00  from holding ZenaTech or generate 111.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Cloudflare  vs.  ZenaTech

Cloudflare

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cloudflare are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Cloudflare unveiled solid returns over the last few months and may actually be approaching a breakup point.

ZenaTech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZenaTech are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ZenaTech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cloudflare and ZenaTech

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

The idea behind Cloudflare and ZenaTech 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.