Correlation Between ZOO Digital and FalconStor Software

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

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

Diversification Opportunities for ZOO Digital and FalconStor Software

0.67

Correlation Coefficient

ZOO Digital  FalconStor Software

Poor diversification

The 3 months correlation between ZOO and FalconStor is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ZOO Digital Group and FalconStor Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FalconStor Software and ZOO Digital 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 ZOO Digital Group are associated (or correlated) with FalconStor Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FalconStor Software has no effect on the direction of ZOO Digital i.e., ZOO Digital and FalconStor Software go up and down completely randomly.

Pair Corralation between ZOO Digital and FalconStor Software

Assuming the 90 days horizon ZOO Digital Group is expected to under-perform the FalconStor Software. But the pink sheet apears to be less risky and, when comparing its historical volatility, ZOO Digital Group is 3.69 times less risky than FalconStor Software. The pink sheet trades about -0.15 of its potential returns per unit of risk. The FalconStor Software is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  177.00  in FalconStor Software on September 12, 2025 and sell it today you would earn a total of  1.00  from holding FalconStor Software or generate 0.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.67%
Values	Daily Returns

ZOO Digital Group  vs.  FalconStor Software

ZOO Digital Group

Risk-Adjusted Performance

Weakest

Over the last 90 days ZOO Digital Group 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 nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

FalconStor Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FalconStor Software are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, FalconStor Software exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZOO Digital and FalconStor Software

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

The idea behind ZOO Digital Group and FalconStor Software 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 Stocks Directory module to find actively traded stocks across global markets.