Correlation Between AerCap Holdings and Zoom Video
Can any of the company-specific risk be diversified away by investing in both AerCap Holdings 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 AerCap Holdings and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerCap Holdings NV and Zoom Video Communications, you can compare the effects of market volatilities on AerCap Holdings 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 AerCap Holdings with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and Zoom Video.
Diversification Opportunities for AerCap Holdings and Zoom Video
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AerCap and Zoom is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV 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 AerCap Holdings 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 AerCap Holdings NV 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 AerCap Holdings i.e., AerCap Holdings and Zoom Video go up and down completely randomly.
Pair Corralation between AerCap Holdings and Zoom Video
Considering the 90-day investment horizon AerCap Holdings is expected to generate 4.68 times less return on investment than Zoom Video. But when comparing it to its historical volatility, AerCap Holdings NV is 1.74 times less risky than Zoom Video. It trades about 0.14 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 7,385 in Zoom Video Communications on August 28, 2024 and sell it today you would earn a total of 1,518 from holding Zoom Video Communications or generate 20.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerCap Holdings NV vs. Zoom Video Communications
Performance |
| Timeline |
| AerCap Holdings NV |
| Zoom Video Communications |
AerCap Holdings and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerCap Holdings and Zoom Video
The main advantage of trading using opposite AerCap Holdings and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings 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.| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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