Correlation Between Zoom Video and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Fresenius Medical 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 Zoom Video and Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zoom Video Communications and Fresenius Medical Care, you can compare the effects of market volatilities on Zoom Video and Fresenius Medical 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 Zoom Video with a short position of Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Fresenius Medical.
Diversification Opportunities for Zoom Video and Fresenius Medical
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zoom and Fresenius is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care and Zoom Video 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 Zoom Video Communications are associated (or correlated) with Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Zoom Video i.e., Zoom Video and Fresenius Medical go up and down completely randomly.
Pair Corralation between Zoom Video and Fresenius Medical
Assuming the 90 days trading horizon Zoom Video Communications is expected to under-perform the Fresenius Medical. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 1.01 times less risky than Fresenius Medical. The stock trades about -0.34 of its potential returns per unit of risk. The Fresenius Medical Care is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 4,539 in Fresenius Medical Care on October 15, 2024 and sell it today you would lose (145.00) from holding Fresenius Medical Care or give up 3.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Zoom Video Communications vs. Fresenius Medical Care
Performance |
| Timeline |
| Zoom Video Communications |
| Fresenius Medical Care |
Zoom Video and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Fresenius Medical
The main advantage of trading using opposite Zoom Video and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Zoom Video vs. Naked Wines plc | Zoom Video vs. Coeur Mining | Zoom Video vs. Martin Marietta Materials | Zoom Video vs. Applied Materials |
| Fresenius Medical vs. Zoom Video Communications | Fresenius Medical vs. Cairo Communication SpA | Fresenius Medical vs. Verizon Communications | Fresenius Medical vs. Martin Marietta Materials |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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