Correlation Between Zoom Video and Anglo Asian

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

Diversification Opportunities for Zoom Video and Anglo Asian

-0.22

Correlation Coefficient

Zoom Video  Anglo Asian

Very good diversification

The 3 months correlation between Zoom and Anglo is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Anglo Asian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Asian Mining 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 Anglo Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Asian Mining has no effect on the direction of Zoom Video i.e., Zoom Video and Anglo Asian go up and down completely randomly.

Pair Corralation between Zoom Video and Anglo Asian

If you would invest  10,600  in Anglo Asian Mining on December 20, 2024 and sell it today you would earn a total of  1,900  from holding Anglo Asian Mining or generate 17.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Zoom Video Communications  vs.  Anglo Asian Mining

Zoom Video Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoom Video Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Zoom Video is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Anglo Asian Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anglo Asian Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Anglo Asian exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zoom Video and Anglo Asian

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

The idea behind Zoom Video Communications and Anglo Asian Mining 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.