Correlation Between Zoom Video and TotalEnergies

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

Diversification Opportunities for Zoom Video and TotalEnergies

-0.72

Correlation Coefficient

Zoom Video  TotalEnergies

Pay attention - limited upside

The 3 months correlation between Zoom and TotalEnergies is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of Zoom Video i.e., Zoom Video and TotalEnergies go up and down completely randomly.

Pair Corralation between Zoom Video and TotalEnergies

Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 0.87 times more return on investment than TotalEnergies. However, Zoom Video Communications is 1.16 times less risky than TotalEnergies. It trades about 0.04 of its potential returns per unit of risk. TotalEnergies SE is currently generating about 0.01 per unit of risk. If you would invest  6,830  in Zoom Video Communications on October 24, 2024 and sell it today you would earn a total of  1,020  from holding Zoom Video Communications or generate 14.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.21%
Values	Daily Returns

Zoom Video Communications  vs.  TotalEnergies SE

Zoom Video Communications

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zoom Video may actually be approaching a critical reversion point that can send shares even higher in February 2025.

TotalEnergies SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TotalEnergies SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TotalEnergies is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Zoom Video and TotalEnergies

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

The idea behind Zoom Video Communications and TotalEnergies SE 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.

Check out your portfolio center.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.