Correlation Between Zoom Video and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Golden Metal 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 Golden Metal 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 Golden Metal Resources, you can compare the effects of market volatilities on Zoom Video and Golden Metal 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 Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Golden Metal.
Diversification Opportunities for Zoom Video and Golden Metal
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zoom and Golden is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources 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 Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Zoom Video i.e., Zoom Video and Golden Metal go up and down completely randomly.
Pair Corralation between Zoom Video and Golden Metal
Assuming the 90 days trading horizon Zoom Video Communications is expected to under-perform the Golden Metal. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 2.19 times less risky than Golden Metal. The stock trades about -0.22 of its potential returns per unit of risk. The Golden Metal Resources is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,900 in Golden Metal Resources on October 18, 2024 and sell it today you would earn a total of 350.00 from holding Golden Metal Resources or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Zoom Video Communications vs. Golden Metal Resources
Performance |
| Timeline |
| Zoom Video Communications |
| Golden Metal Resources |
Zoom Video and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Golden Metal
The main advantage of trading using opposite Zoom Video and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's long position.| Zoom Video vs. Molson Coors Beverage | Zoom Video vs. Intermediate Capital Group | Zoom Video vs. Qurate Retail Series | Zoom Video vs. Young Cos Brewery |
| Golden Metal vs. Zegona Communications Plc | Golden Metal vs. Primary Health Properties | Golden Metal vs. Cardinal Health | Golden Metal 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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