Correlation Between Trust Stamp and Zoom Video

Can any of the company-specific risk be diversified away by investing in both Trust Stamp and Zoom Video 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 Trust Stamp and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trust Stamp and Zoom Video Communications, you can compare the effects of market volatilities on Trust Stamp and Zoom Video 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 Trust Stamp with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trust Stamp and Zoom Video.

Diversification Opportunities for Trust Stamp and Zoom Video

-0.27

Correlation Coefficient

Trust Stamp  Zoom Video

Very good diversification

The 3 months correlation between Trust and Zoom is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Trust Stamp and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications and Trust Stamp 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 Trust Stamp are associated (or correlated) with Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Trust Stamp i.e., Trust Stamp and Zoom Video go up and down completely randomly.

Pair Corralation between Trust Stamp and Zoom Video

Given the investment horizon of 90 days Trust Stamp is expected to generate 10.84 times more return on investment than Zoom Video. However, Trust Stamp is 10.84 times more volatile than Zoom Video Communications. It trades about 0.14 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.18 per unit of risk. If you would invest  32.00  in Trust Stamp on August 30, 2024 and sell it today you would earn a total of  52.00  from holding Trust Stamp or generate 162.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Trust Stamp  vs.  Zoom Video Communications

Trust Stamp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trust Stamp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Trust Stamp demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Zoom Video Communications

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Zoom Video displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trust Stamp and Zoom Video

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

The idea behind Trust Stamp and Zoom Video Communications 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.

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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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.