Correlation Between Zoom Video and AbbVie
Can any of the company-specific risk be diversified away by investing in both Zoom Video and AbbVie 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 AbbVie 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 AbbVie Inc, you can compare the effects of market volatilities on Zoom Video and AbbVie 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 AbbVie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and AbbVie.
Diversification Opportunities for Zoom Video and AbbVie
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zoom and AbbVie is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and AbbVie Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbbVie 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 AbbVie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbbVie Inc has no effect on the direction of Zoom Video i.e., Zoom Video and AbbVie go up and down completely randomly.
Pair Corralation between Zoom Video and AbbVie
Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 1.37 times more return on investment than AbbVie. However, Zoom Video is 1.37 times more volatile than AbbVie Inc. It trades about 0.1 of its potential returns per unit of risk. AbbVie Inc is currently generating about 0.01 per unit of risk. If you would invest 1,980 in Zoom Video Communications on September 13, 2024 and sell it today you would earn a total of 116.00 from holding Zoom Video Communications or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoom Video Communications vs. AbbVie Inc
Performance |
| Timeline |
| Zoom Video Communications |
| AbbVie Inc |
Zoom Video and AbbVie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and AbbVie
The main advantage of trading using opposite Zoom Video and AbbVie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, AbbVie 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 AbbVie will offset losses from the drop in AbbVie's long position.| Zoom Video vs. ServiceNow | Zoom Video vs. Uber Technologies | Zoom Video vs. Shopify | Zoom Video vs. Autodesk |
| AbbVie vs. Autohome | AbbVie vs. British American Tobacco | AbbVie vs. Zoom Video Communications | AbbVie vs. Teladoc Health |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |