Correlation Between Zoom Video and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Zoom Video and CATLIN GROUP 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 CATLIN GROUP 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 CATLIN GROUP , you can compare the effects of market volatilities on Zoom Video and CATLIN GROUP 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and CATLIN GROUP.
Diversification Opportunities for Zoom Video and CATLIN GROUP
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zoom and CATLIN is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Zoom Video i.e., Zoom Video and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Zoom Video and CATLIN GROUP
Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 1.2 times more return on investment than CATLIN GROUP. However, Zoom Video is 1.2 times more volatile than CATLIN GROUP . It trades about 0.06 of its potential returns per unit of risk. CATLIN GROUP is currently generating about 0.05 per unit of risk. If you would invest 6,553 in Zoom Video Communications on September 14, 2024 and sell it today you would earn a total of 2,009 from holding Zoom Video Communications or generate 30.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.91% |
| Values | Daily Returns |
Zoom Video Communications vs. CATLIN GROUP
Performance |
| Timeline |
| Zoom Video Communications |
| CATLIN GROUP |
Zoom Video and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and CATLIN GROUP
The main advantage of trading using opposite Zoom Video and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.| Zoom Video vs. Enbridge | Zoom Video vs. Endo International PLC | Zoom Video vs. DS Smith PLC | Zoom Video vs. Rolls Royce Holdings PLC |
| CATLIN GROUP vs. Alfa Financial Software | CATLIN GROUP vs. L3Harris Technologies | CATLIN GROUP vs. Cairo Communication SpA | CATLIN GROUP vs. Zoom Video Communications |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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