Correlation Between AMG Advanced and Zoom Video
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Zoom Video 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 AMG Advanced and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Zoom Video Communications, you can compare the effects of market volatilities on AMG Advanced and Zoom Video 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 AMG Advanced with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Zoom Video.
Diversification Opportunities for AMG Advanced and Zoom Video
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between AMG and Zoom is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of AMG Advanced i.e., AMG Advanced and Zoom Video go up and down completely randomly.
Pair Corralation between AMG Advanced and Zoom Video
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Zoom Video. In addition to that, AMG Advanced is 1.14 times more volatile than Zoom Video Communications. It trades about -0.06 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about 0.02 per unit of volatility. If you would invest 7,292 in Zoom Video Communications on August 24, 2024 and sell it today you would earn a total of 1,209 from holding Zoom Video Communications or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Zoom Video Communications
Performance |
| Timeline |
| AMG Advanced Metallu |
| Zoom Video Communications |
AMG Advanced and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Zoom Video
The main advantage of trading using opposite AMG Advanced and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| AMG Advanced vs. Quadrise Plc | AMG Advanced vs. Intuitive Investments Group | AMG Advanced vs. European Metals Holdings | AMG Advanced vs. Athelney Trust plc |
| Zoom Video vs. Liberty Media Corp | Zoom Video vs. Samsung Electronics Co | Zoom Video vs. Grand Vision Media | Zoom Video vs. Catena Media PLC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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