Correlation Between Zoom Video and American Tower
Can any of the company-specific risk be diversified away by investing in both Zoom Video and American Tower 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 American Tower 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 American Tower, you can compare the effects of market volatilities on Zoom Video and American Tower 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 American Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and American Tower.
Diversification Opportunities for Zoom Video and American Tower
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zoom and American is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and American Tower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Tower 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 American Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Tower has no effect on the direction of Zoom Video i.e., Zoom Video and American Tower go up and down completely randomly.
Pair Corralation between Zoom Video and American Tower
Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 1.06 times more return on investment than American Tower. However, Zoom Video is 1.06 times more volatile than American Tower. It trades about 0.28 of its potential returns per unit of risk. American Tower is currently generating about 0.01 per unit of risk. If you would invest 1,510 in Zoom Video Communications on August 30, 2024 and sell it today you would earn a total of 498.00 from holding Zoom Video Communications or generate 32.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Zoom Video Communications vs. American Tower
Performance |
| Timeline |
| Zoom Video Communications |
| American Tower |
Zoom Video and American Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zoom Video and American Tower
The main advantage of trading using opposite Zoom Video and American Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, American Tower 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 American Tower will offset losses from the drop in American Tower's long position.| Zoom Video vs. Unity Software | Zoom Video vs. Take Two Interactive Software | Zoom Video vs. Monster Beverage | Zoom Video vs. Micron Technology |
| American Tower vs. Equinix | American Tower vs. Iron Mountain Incorporated | American Tower vs. CA Modas SA | American Tower vs. Banco do Estado |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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