Correlation Between Catena Media and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Catena Media 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 Catena Media and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media PLC and Zoom Video Communications, you can compare the effects of market volatilities on Catena Media 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 Catena Media with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Zoom Video.
Diversification Opportunities for Catena Media and Zoom Video
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Catena and Zoom is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC 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 Catena Media 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 Catena Media PLC 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 Catena Media i.e., Catena Media and Zoom Video go up and down completely randomly.
Pair Corralation between Catena Media and Zoom Video
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Zoom Video. In addition to that, Catena Media is 1.72 times more volatile than Zoom Video Communications. It trades about -0.28 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about 0.26 per unit of volatility. If you would invest 7,225 in Zoom Video Communications on August 24, 2024 and sell it today you would earn a total of 895.00 from holding Zoom Video Communications or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media PLC vs. Zoom Video Communications
Performance |
| Timeline |
| Catena Media PLC |
| Zoom Video Communications |
Catena Media and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Zoom Video
The main advantage of trading using opposite Catena Media and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media 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.| Catena Media vs. Primorus Investments plc | Catena Media vs. International Consolidated Airlines | Catena Media vs. Batm Advanced Communications | Catena Media vs. Gamma Communications 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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