Correlation Between Zoom Video and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Agilent Technologies 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 Zoom Video and Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zoom Video Communications and Agilent Technologies, you can compare the effects of market volatilities on Zoom Video and Agilent Technologies 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 Zoom Video with a short position of Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Agilent Technologies.
Diversification Opportunities for Zoom Video and Agilent Technologies
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zoom and Agilent is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Zoom Video 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 Zoom Video Communications are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Zoom Video i.e., Zoom Video and Agilent Technologies go up and down completely randomly.
Pair Corralation between Zoom Video and Agilent Technologies
Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 3.11 times more return on investment than Agilent Technologies. However, Zoom Video is 3.11 times more volatile than Agilent Technologies. It trades about 0.24 of its potential returns per unit of risk. Agilent Technologies is currently generating about 0.32 per unit of risk. If you would invest 1,750 in Zoom Video Communications on August 30, 2024 and sell it today you would earn a total of 258.00 from holding Zoom Video Communications or generate 14.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoom Video Communications vs. Agilent Technologies
Performance |
| Timeline |
| Zoom Video Communications |
| Agilent Technologies |
Zoom Video and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Agilent Technologies
The main advantage of trading using opposite Zoom Video and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| Zoom Video vs. The Home Depot | Zoom Video vs. United States Steel | Zoom Video vs. Brpr Corporate Offices | Zoom Video vs. STMicroelectronics NV |
| Agilent Technologies vs. Brpr Corporate Offices | Agilent Technologies vs. Take Two Interactive Software | Agilent Technologies vs. Capital One Financial | Agilent Technologies vs. British American Tobacco |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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