Correlation Between Biglari Holdings and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Biglari 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 Biglari 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 Biglari Holdings and Zoom Video Communications, you can compare the effects of market volatilities on Biglari 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 Biglari Holdings with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Zoom Video.
Diversification Opportunities for Biglari Holdings and Zoom Video
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Biglari and Zoom is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings 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 Biglari 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 Biglari Holdings 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 Biglari Holdings i.e., Biglari Holdings and Zoom Video go up and down completely randomly.
Pair Corralation between Biglari Holdings and Zoom Video
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 2.21 times less return on investment than Zoom Video. In addition to that, Biglari Holdings is 1.14 times more volatile than Zoom Video Communications. It trades about 0.02 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about 0.04 per unit of volatility. If you would invest 6,674 in Zoom Video Communications on August 31, 2024 and sell it today you would earn a total of 1,595 from holding Zoom Video Communications or generate 23.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Zoom Video Communications
Performance |
| Timeline |
| Biglari Holdings |
| Zoom Video Communications |
Biglari Holdings and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Zoom Video
The main advantage of trading using opposite Biglari Holdings and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari 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.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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