Correlation Between Zoom Video and ShiftCarbon

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

Diversification Opportunities for Zoom Video and ShiftCarbon

0.0

Correlation Coefficient

Zoom Video  ShiftCarbon

Pay attention - limited upside

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

Pair Corralation between Zoom Video and ShiftCarbon

If you would invest  6,762  in Zoom Video Communications on September 15, 2024 and sell it today you would earn a total of  1,617  from holding Zoom Video Communications or generate 23.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	31.25%
Values	Daily Returns

Zoom Video Communications  vs.  ShiftCarbon

Zoom Video Communications

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Zoom Video displayed solid returns over the last few months and may actually be approaching a breakup point.

ShiftCarbon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ShiftCarbon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, ShiftCarbon is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Zoom Video and ShiftCarbon

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

The idea behind Zoom Video Communications and ShiftCarbon 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 CEOs Directory module to screen CEOs from public companies around the world.