Correlation Between Whitehaven Coal and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Whitehaven Coal 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 Whitehaven Coal and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whitehaven Coal Limited and Zoom Video Communications, you can compare the effects of market volatilities on Whitehaven Coal 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 Whitehaven Coal with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitehaven Coal and Zoom Video.
Diversification Opportunities for Whitehaven Coal and Zoom Video
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Whitehaven and Zoom is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Whitehaven Coal Limited 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 Whitehaven Coal 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 Whitehaven Coal Limited 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 Whitehaven Coal i.e., Whitehaven Coal and Zoom Video go up and down completely randomly.
Pair Corralation between Whitehaven Coal and Zoom Video
Assuming the 90 days horizon Whitehaven Coal Limited is expected to under-perform the Zoom Video. But the stock apears to be less risky and, when comparing its historical volatility, Whitehaven Coal Limited is 1.97 times less risky than Zoom Video. The stock trades about -0.02 of its potential returns per unit of risk. The Zoom Video Communications is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,960 in Zoom Video Communications on September 4, 2024 and sell it today you would earn a total of 948.00 from holding Zoom Video Communications or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Whitehaven Coal Limited vs. Zoom Video Communications
Performance |
| Timeline |
| Whitehaven Coal |
| Zoom Video Communications |
Whitehaven Coal and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whitehaven Coal and Zoom Video
The main advantage of trading using opposite Whitehaven Coal and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whitehaven Coal 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.| Whitehaven Coal vs. Wyndham Hotels Resorts | Whitehaven Coal vs. Meli Hotels International | Whitehaven Coal vs. NH HOTEL GROUP | Whitehaven Coal vs. COVIVIO HOTELS INH |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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