Correlation Between Zoom Video and ITV PLC
Can any of the company-specific risk be diversified away by investing in both Zoom Video and ITV PLC 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 ITV PLC 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 ITV PLC, you can compare the effects of market volatilities on Zoom Video and ITV PLC 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 ITV PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and ITV PLC.
Diversification Opportunities for Zoom Video and ITV PLC
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zoom and ITV is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and ITV PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV PLC 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 ITV PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV PLC has no effect on the direction of Zoom Video i.e., Zoom Video and ITV PLC go up and down completely randomly.
Pair Corralation between Zoom Video and ITV PLC
Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 1.15 times more return on investment than ITV PLC. However, Zoom Video is 1.15 times more volatile than ITV PLC. It trades about 0.02 of its potential returns per unit of risk. ITV PLC is currently generating about 0.02 per unit of risk. If you would invest 7,274 in Zoom Video Communications on September 4, 2024 and sell it today you would earn a total of 1,072 from holding Zoom Video Communications or generate 14.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Zoom Video Communications vs. ITV PLC
Performance |
| Timeline |
| Zoom Video Communications |
| ITV PLC |
Zoom Video and ITV PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and ITV PLC
The main advantage of trading using opposite Zoom Video and ITV PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, ITV PLC 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 ITV PLC will offset losses from the drop in ITV PLC's long position.| Zoom Video vs. Enbridge | Zoom Video vs. Endo International PLC | Zoom Video vs. State Street Corp | Zoom Video vs. DXC Technology Co |
| ITV PLC vs. Herald Investment Trust | ITV PLC vs. Bloomsbury Publishing Plc | ITV PLC vs. Wyndham Hotels Resorts | ITV PLC vs. Monks Investment Trust |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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