Correlation Between GEELY AUTOMOBILE and Zoom Video
Can any of the company-specific risk be diversified away by investing in both GEELY AUTOMOBILE 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 GEELY AUTOMOBILE and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEELY AUTOMOBILE and Zoom Video Communications, you can compare the effects of market volatilities on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEELY AUTOMOBILE and Zoom Video.
Diversification Opportunities for GEELY AUTOMOBILE and Zoom Video
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GEELY and Zoom is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE i.e., GEELY AUTOMOBILE and Zoom Video go up and down completely randomly.
Pair Corralation between GEELY AUTOMOBILE and Zoom Video
Assuming the 90 days trading horizon GEELY AUTOMOBILE is expected to generate 2.81 times less return on investment than Zoom Video. But when comparing it to its historical volatility, GEELY AUTOMOBILE is 1.53 times less risky than Zoom Video. It trades about 0.06 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8,004 in Zoom Video Communications on November 4, 2024 and sell it today you would earn a total of 400.00 from holding Zoom Video Communications or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEELY AUTOMOBILE vs. Zoom Video Communications
Performance |
| Timeline |
| GEELY AUTOMOBILE |
| Zoom Video Communications |
GEELY AUTOMOBILE and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEELY AUTOMOBILE and Zoom Video
The main advantage of trading using opposite GEELY AUTOMOBILE and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEELY AUTOMOBILE 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.| GEELY AUTOMOBILE vs. Daido Steel Co | GEELY AUTOMOBILE vs. Delta Electronics Public | GEELY AUTOMOBILE vs. COSMOSTEEL HLDGS | GEELY AUTOMOBILE vs. Samsung Electronics Co |
| Zoom Video vs. SIVERS SEMICONDUCTORS AB | Zoom Video vs. NorAm Drilling AS | Zoom Video vs. Volkswagen AG | Zoom Video vs. Darden Restaurants |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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