Correlation Between X FAB and Zoom Video
Can any of the company-specific risk be diversified away by investing in both X FAB 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 X FAB and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Zoom Video Communications, you can compare the effects of market volatilities on X FAB 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 X FAB with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Zoom Video.
Diversification Opportunities for X FAB and Zoom Video
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0ROZ and Zoom is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries 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 X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and Zoom Video go up and down completely randomly.
Pair Corralation between X FAB and Zoom Video
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 5.19 times more return on investment than Zoom Video. However, X FAB is 5.19 times more volatile than Zoom Video Communications. It trades about 0.09 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.03 per unit of risk. If you would invest 459.00 in X FAB Silicon Foundries on September 13, 2024 and sell it today you would earn a total of 34.00 from holding X FAB Silicon Foundries or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Zoom Video Communications
Performance |
| Timeline |
| X FAB Silicon |
| Zoom Video Communications |
X FAB and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Zoom Video
The main advantage of trading using opposite X FAB and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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.| X FAB vs. Samsung Electronics Co | X FAB vs. Samsung Electronics Co | X FAB vs. Hyundai Motor | X FAB vs. Reliance Industries Ltd |
| Zoom Video vs. Enbridge | Zoom Video vs. Endo International PLC | Zoom Video vs. DS Smith PLC | Zoom Video vs. Rolls Royce Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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