Correlation Between Zoom Video and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Zoom Video and LPKF Laser 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 LPKF Laser 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 LPKF Laser Electronics, you can compare the effects of market volatilities on Zoom Video and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and LPKF Laser.
Diversification Opportunities for Zoom Video and LPKF Laser
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zoom and LPKF is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of Zoom Video i.e., Zoom Video and LPKF Laser go up and down completely randomly.
Pair Corralation between Zoom Video and LPKF Laser
Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 1.45 times more return on investment than LPKF Laser. However, Zoom Video is 1.45 times more volatile than LPKF Laser Electronics. It trades about 0.19 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.12 per unit of risk. If you would invest 8,202 in Zoom Video Communications on November 5, 2024 and sell it today you would earn a total of 611.00 from holding Zoom Video Communications or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoom Video Communications vs. LPKF Laser Electronics
Performance |
| Timeline |
| Zoom Video Communications |
| LPKF Laser Electronics |
Zoom Video and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and LPKF Laser
The main advantage of trading using opposite Zoom Video and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| Zoom Video vs. Blackrock World Mining | Zoom Video vs. Science in Sport | Zoom Video vs. European Metals Holdings | Zoom Video vs. Rheinmetall AG |
| LPKF Laser vs. Ebro Foods | LPKF Laser vs. Bell Food Group | LPKF Laser vs. Associated British Foods | LPKF Laser vs. Young Cos Brewery |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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