Correlation Between NH Foods and Zoom Video
Can any of the company-specific risk be diversified away by investing in both NH Foods 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 NH Foods and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods and Zoom Video Communications, you can compare the effects of market volatilities on NH Foods 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 NH Foods with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and Zoom Video.
Diversification Opportunities for NH Foods and Zoom Video
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NI6 and Zoom is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods 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 NH Foods 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 NH Foods 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 NH Foods i.e., NH Foods and Zoom Video go up and down completely randomly.
Pair Corralation between NH Foods and Zoom Video
Assuming the 90 days horizon NH Foods is expected to generate 48.78 times less return on investment than Zoom Video. But when comparing it to its historical volatility, NH Foods is 2.11 times less risky than Zoom Video. It trades about 0.01 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 7,928 in Zoom Video Communications on November 1, 2024 and sell it today you would earn a total of 457.00 from holding Zoom Video Communications or generate 5.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Foods vs. Zoom Video Communications
Performance |
| Timeline |
| NH Foods |
| Zoom Video Communications |
NH Foods and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and Zoom Video
The main advantage of trading using opposite NH Foods and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods 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.| NH Foods vs. RCI Hospitality Holdings | NH Foods vs. SIEM OFFSHORE NEW | NH Foods vs. Acadia Healthcare | NH Foods vs. Cardinal Health |
| Zoom Video vs. NTG Nordic Transport | Zoom Video vs. Columbia Sportswear | Zoom Video vs. ANTA SPORTS PRODUCT | Zoom Video vs. PennantPark Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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