Correlation Between Zoom Video and Evonik Industries
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Evonik Industries 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 Evonik Industries 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 Evonik Industries AG, you can compare the effects of market volatilities on Zoom Video and Evonik Industries 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 Evonik Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Evonik Industries.
Diversification Opportunities for Zoom Video and Evonik Industries
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zoom and Evonik is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Evonik Industries AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evonik Industries 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 Evonik Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evonik Industries has no effect on the direction of Zoom Video i.e., Zoom Video and Evonik Industries go up and down completely randomly.
Pair Corralation between Zoom Video and Evonik Industries
Assuming the 90 days trading horizon Zoom Video is expected to generate 1.31 times less return on investment than Evonik Industries. In addition to that, Zoom Video is 1.67 times more volatile than Evonik Industries AG. It trades about 0.13 of its total potential returns per unit of risk. Evonik Industries AG is currently generating about 0.28 per unit of volatility. If you would invest 1,672 in Evonik Industries AG on November 3, 2024 and sell it today you would earn a total of 142.00 from holding Evonik Industries AG or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoom Video Communications vs. Evonik Industries AG
Performance |
| Timeline |
| Zoom Video Communications |
| Evonik Industries |
Zoom Video and Evonik Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Evonik Industries
The main advantage of trading using opposite Zoom Video and Evonik Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Evonik Industries 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 Evonik Industries will offset losses from the drop in Evonik Industries' long position.| Zoom Video vs. NH HOTEL GROUP | Zoom Video vs. Allegheny Technologies Incorporated | Zoom Video vs. Addtech AB | Zoom Video vs. InterContinental Hotels Group |
| Evonik Industries vs. Gladstone Investment | Evonik Industries vs. INTERNET INJPADR 1 | Evonik Industries vs. HEMISPHERE EGY | Evonik Industries vs. ECHO INVESTMENT ZY |
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 Correlations module to find global opportunities by holding instruments from different markets.
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