Correlation Between Zoom Video and VISA INC

Can any of the company-specific risk be diversified away by investing in both Zoom Video and VISA INC 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 VISA INC 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 VISA INC CL, you can compare the effects of market volatilities on Zoom Video and VISA INC 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 VISA INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and VISA INC.

Diversification Opportunities for Zoom Video and VISA INC

0.0

Correlation Coefficient

Zoom Video  VISA INC

Pay attention - limited upside

The 3 months correlation between Zoom and VISA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and VISA INC CL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VISA INC CL 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 VISA INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VISA INC CL has no effect on the direction of Zoom Video i.e., Zoom Video and VISA INC go up and down completely randomly.

Pair Corralation between Zoom Video and VISA INC

If you would invest (100.00) in VISA INC CL on September 25, 2024 and sell it today you would earn a total of  100.00  from holding VISA INC CL or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Zoom Video Communications  vs.  VISA INC CL

Zoom Video Communications

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zoom Video unveiled solid returns over the last few months and may actually be approaching a breakup point.

VISA INC CL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VISA INC CL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, VISA INC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zoom Video and VISA INC

The main advantage of trading using opposite Zoom Video and VISA INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, VISA INC 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 VISA INC will offset losses from the drop in VISA INC's long position.

The idea behind Zoom Video Communications and VISA INC CL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.