Correlation Between Zoom Video and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Beazer Homes 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 Beazer Homes 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 Beazer Homes USA, you can compare the effects of market volatilities on Zoom Video and Beazer Homes 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 Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Beazer Homes.
Diversification Opportunities for Zoom Video and Beazer Homes
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zoom and Beazer is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Beazer Homes USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beazer Homes USA 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 Beazer Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beazer Homes USA has no effect on the direction of Zoom Video i.e., Zoom Video and Beazer Homes go up and down completely randomly.
Pair Corralation between Zoom Video and Beazer Homes
Assuming the 90 days trading horizon Zoom Video is expected to generate 14.08 times less return on investment than Beazer Homes. But when comparing it to its historical volatility, Zoom Video Communications is 1.94 times less risky than Beazer Homes. It trades about 0.01 of its potential returns per unit of risk. Beazer Homes USA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,569 in Beazer Homes USA on October 25, 2024 and sell it today you would earn a total of 1,199 from holding Beazer Homes USA or generate 76.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 59.0% |
| Values | Daily Returns |
Zoom Video Communications vs. Beazer Homes USA
Performance |
| Timeline |
| Zoom Video Communications |
| Beazer Homes USA |
Zoom Video and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Beazer Homes
The main advantage of trading using opposite Zoom Video and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Beazer Homes 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 Beazer Homes will offset losses from the drop in Beazer Homes' long position.| Zoom Video vs. Kinnevik Investment AB | Zoom Video vs. Zinc Media Group | Zoom Video vs. Intermediate Capital Group | Zoom Video vs. Hollywood Bowl Group |
| Beazer Homes vs. Toyota Motor Corp | Beazer Homes vs. SoftBank Group Corp | Beazer Homes vs. OTP Bank Nyrt | Beazer Homes vs. ONEOK Inc |
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 CEOs Directory module to screen CEOs from public companies around the world.
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