Correlation Between Roebuck Food and Zoom Video

Can any of the company-specific risk be diversified away by investing in both Roebuck 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 Roebuck 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 Roebuck Food Group and Zoom Video Communications, you can compare the effects of market volatilities on Roebuck 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 Roebuck Food with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Zoom Video.

Diversification Opportunities for Roebuck Food and Zoom Video

0.38

Correlation Coefficient

Roebuck Food  Zoom Video

Weak diversification

The 3 months correlation between Roebuck and Zoom is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck 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 Roebuck 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 Roebuck 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 Roebuck Food i.e., Roebuck Food and Zoom Video go up and down completely randomly.

Pair Corralation between Roebuck Food and Zoom Video

Assuming the 90 days trading horizon Roebuck Food Group is expected to generate 0.16 times more return on investment than Zoom Video. However, Roebuck Food Group is 6.07 times less risky than Zoom Video. It trades about -0.22 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.06 per unit of risk. If you would invest  1,680  in Roebuck Food Group on September 29, 2024 and sell it today you would lose (20.00) from holding Roebuck Food Group or give up 1.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Roebuck Food Group  vs.  Zoom Video Communications

Roebuck Food Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roebuck Food Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Roebuck Food is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Zoom Video Communications

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 11 (%) 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.

Pair Trading with Roebuck Food and Zoom Video

The main advantage of trading using opposite Roebuck Food and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck 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 Roebuck 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.