Correlation Between RETAIL FOOD and Zoom Video

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

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

Diversification Opportunities for RETAIL FOOD and Zoom Video

0.15

Correlation Coefficient

RETAIL FOOD  Zoom Video

Average diversification

The 3 months correlation between RETAIL and Zoom is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP 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 RETAIL FOOD 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 RETAIL FOOD GROUP 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 RETAIL FOOD i.e., RETAIL FOOD and Zoom Video go up and down completely randomly.

Pair Corralation between RETAIL FOOD and Zoom Video

Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the Zoom Video. In addition to that, RETAIL FOOD is 3.22 times more volatile than Zoom Video Communications. It trades about -0.05 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about 0.05 per unit of volatility. If you would invest  6,545  in Zoom Video Communications on September 13, 2024 and sell it today you would earn a total of  1,388  from holding Zoom Video Communications or generate 21.21% return on investment over 90 days.

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

RETAIL FOOD GROUP  vs.  Zoom Video Communications

RETAIL FOOD GROUP

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Zoom Video Communications

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Zoom Video unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RETAIL FOOD and Zoom Video

The main advantage of trading using opposite RETAIL FOOD and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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 RETAIL FOOD GROUP 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 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..