Correlation Between Zoom Video and Apple
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Zoom Video and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Apple.
Diversification Opportunities for Zoom Video and Apple
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zoom and Apple is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Zoom Video i.e., Zoom Video and Apple go up and down completely randomly.
Pair Corralation between Zoom Video and Apple
Assuming the 90 days trading horizon Zoom Video Communications is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 1.12 times less risky than Apple. The stock trades about -0.17 of its potential returns per unit of risk. The Apple Inc is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 7,515 in Apple Inc on October 14, 2024 and sell it today you would lose (313.00) from holding Apple Inc or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoom Video Communications vs. Apple Inc
Performance |
| Timeline |
| Zoom Video Communications |
| Apple Inc |
Zoom Video and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Apple
The main advantage of trading using opposite Zoom Video and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Zoom Video vs. BIONTECH SE DRN | Zoom Video vs. Zebra Technologies | Zoom Video vs. Seagate Technology Holdings | Zoom Video vs. Unity Software |
| Apple vs. Patria Investments Limited | Apple vs. Ares Management | Apple vs. Zoom Video Communications | Apple vs. Bemobi Mobile Tech |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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