Correlation Between Zscaler and Digital Turbine

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

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

Diversification Opportunities for Zscaler and Digital Turbine

0.68

Correlation Coefficient

Zscaler  Digital Turbine

Poor diversification

The 3 months correlation between Zscaler and Digital is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Zscaler and Digital Turbine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Turbine 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 Digital Turbine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Turbine has no effect on the direction of Zscaler i.e., Zscaler and Digital Turbine go up and down completely randomly.

Pair Corralation between Zscaler and Digital Turbine

Allowing for the 90-day total investment horizon Zscaler is expected to generate 1.79 times less return on investment than Digital Turbine. But when comparing it to its historical volatility, Zscaler is 4.36 times less risky than Digital Turbine. It trades about 0.09 of its potential returns per unit of risk. Digital Turbine is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  437.00  in Digital Turbine on May 12, 2025 and sell it today you would lose (2.00) from holding Digital Turbine or give up 0.46% of portfolio value over 90 days.

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

Zscaler  vs.  Digital Turbine

Zscaler

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Zscaler are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Zscaler may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Digital Turbine

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Digital Turbine are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Digital Turbine unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zscaler and Digital Turbine

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

The idea behind Zscaler and Digital Turbine 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.