Correlation Between National Bank and Zoom Video
Can any of the company-specific risk be diversified away by investing in both National Bank 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 National Bank and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank Holdings and Zoom Video Communications, you can compare the effects of market volatilities on National Bank 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 National Bank with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Zoom Video.
Diversification Opportunities for National Bank and Zoom Video
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Zoom is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding National Bank 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 National Bank 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 National Bank 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 National Bank i.e., National Bank and Zoom Video go up and down completely randomly.
Pair Corralation between National Bank and Zoom Video
Assuming the 90 days horizon National Bank Holdings is expected to generate 1.74 times more return on investment than Zoom Video. However, National Bank is 1.74 times more volatile than Zoom Video Communications. It trades about 0.05 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.4 per unit of risk. If you would invest 4,080 in National Bank Holdings on October 25, 2024 and sell it today you would earn a total of 60.00 from holding National Bank Holdings or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank Holdings vs. Zoom Video Communications
Performance |
| Timeline |
| National Bank Holdings |
| Zoom Video Communications |
National Bank and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Zoom Video
The main advantage of trading using opposite National Bank and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank 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.| National Bank vs. GALENA MINING LTD | National Bank vs. British American Tobacco | National Bank vs. Calibre Mining Corp | National Bank vs. Lendlease Group |
| Zoom Video vs. INSURANCE AUST GRP | Zoom Video vs. UPDATE SOFTWARE | Zoom Video vs. Vienna Insurance Group | Zoom Video vs. PKSHA TECHNOLOGY INC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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