Correlation Between Zoom Video and Sony
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Sony 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 Sony 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 Sony Group, you can compare the effects of market volatilities on Zoom Video and Sony 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 Sony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Sony.
Diversification Opportunities for Zoom Video and Sony
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zoom and Sony is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group 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 Sony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group has no effect on the direction of Zoom Video i.e., Zoom Video and Sony go up and down completely randomly.
Pair Corralation between Zoom Video and Sony
Assuming the 90 days trading horizon Zoom Video Communications is expected to under-perform the Sony. In addition to that, Zoom Video is 1.62 times more volatile than Sony Group. It trades about -0.01 of its total potential returns per unit of risk. Sony Group is currently generating about 0.04 per unit of volatility. If you would invest 12,840 in Sony Group on November 7, 2024 and sell it today you would earn a total of 122.00 from holding Sony Group or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zoom Video Communications vs. Sony Group
Performance |
| Timeline |
| Zoom Video Communications |
| Sony Group |
Zoom Video and Sony Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and Sony
The main advantage of trading using opposite Zoom Video and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Sony 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 Sony will offset losses from the drop in Sony's long position.| Zoom Video vs. ServiceNow | Zoom Video vs. Uber Technologies | Zoom Video vs. Snowflake | Zoom Video vs. Datadog, |
| Sony vs. Eastman Chemical | Sony vs. Extra Space Storage | Sony vs. Liberty Broadband | Sony vs. Sumitomo Mitsui Financial |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |