Correlation Between Zoom Video and Baumer SA
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Baumer SA 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 Baumer SA 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 Baumer SA, you can compare the effects of market volatilities on Zoom Video and Baumer SA 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 Baumer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Baumer SA.
Diversification Opportunities for Zoom Video and Baumer SA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zoom and Baumer is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA 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 Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of Zoom Video i.e., Zoom Video and Baumer SA go up and down completely randomly.
Pair Corralation between Zoom Video and Baumer SA
Assuming the 90 days trading horizon Zoom Video is expected to generate 1.24 times less return on investment than Baumer SA. But when comparing it to its historical volatility, Zoom Video Communications is 1.18 times less risky than Baumer SA. It trades about 0.04 of its potential returns per unit of risk. Baumer SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,019 in Baumer SA on November 2, 2024 and sell it today you would earn a total of 381.00 from holding Baumer SA or generate 37.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
Zoom Video Communications vs. Baumer SA
Performance |
| Timeline |
| Zoom Video Communications |
| Baumer SA |
Zoom Video and Baumer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Baumer SA
The main advantage of trading using opposite Zoom Video and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Baumer SA 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 Baumer SA will offset losses from the drop in Baumer SA's long position.| Zoom Video vs. ServiceNow | Zoom Video vs. Uber Technologies | Zoom Video vs. Snowflake | Zoom Video vs. Datadog, |
| Baumer SA vs. Credit Acceptance | Baumer SA vs. Capital One Financial | Baumer SA vs. Sumitomo Mitsui Financial | Baumer SA vs. Applied Materials, |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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