Correlation Between Zoom Video and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Baillie Gifford 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 Baillie Gifford 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 Baillie Gifford European, you can compare the effects of market volatilities on Zoom Video and Baillie Gifford 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 Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Baillie Gifford.
Diversification Opportunities for Zoom Video and Baillie Gifford
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zoom and Baillie is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Baillie Gifford European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford European 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 Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford European has no effect on the direction of Zoom Video i.e., Zoom Video and Baillie Gifford go up and down completely randomly.
Pair Corralation between Zoom Video and Baillie Gifford
Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 2.02 times more return on investment than Baillie Gifford. However, Zoom Video is 2.02 times more volatile than Baillie Gifford European. It trades about 0.03 of its potential returns per unit of risk. Baillie Gifford European is currently generating about 0.01 per unit of risk. If you would invest 7,083 in Zoom Video Communications on November 3, 2024 and sell it today you would earn a total of 1,730 from holding Zoom Video Communications or generate 24.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.35% |
| Values | Daily Returns |
Zoom Video Communications vs. Baillie Gifford European
Performance |
| Timeline |
| Zoom Video Communications |
| Baillie Gifford European |
Zoom Video and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Baillie Gifford
The main advantage of trading using opposite Zoom Video and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Zoom Video vs. Catalyst Media Group | Zoom Video vs. Atresmedia | Zoom Video vs. Mineral Financial Investments | Zoom Video vs. Seraphim Space Investment |
| Baillie Gifford vs. Darden Restaurants | Baillie Gifford vs. Live Nation Entertainment | Baillie Gifford vs. MediaZest plc | Baillie Gifford vs. Catalyst Media Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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