Correlation Between Zoom Video and Astral Foods

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

Diversification Opportunities for Zoom Video and Astral Foods

-0.11

Correlation Coefficient

Zoom Video  Astral Foods

Good diversification

The 3 months correlation between Zoom and Astral is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of Zoom Video i.e., Zoom Video and Astral Foods go up and down completely randomly.

Pair Corralation between Zoom Video and Astral Foods

Assuming the 90 days trading horizon Zoom Video Communications is expected to under-perform the Astral Foods. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 7.2 times less risky than Astral Foods. The stock trades about -0.08 of its potential returns per unit of risk. The Astral Foods Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  378.00  in Astral Foods Limited on December 30, 2024 and sell it today you would earn a total of  422.00  from holding Astral Foods Limited or generate 111.64% return on investment over 90 days.

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

Zoom Video Communications  vs.  Astral Foods Limited

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Astral Foods Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Astral Foods unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zoom Video and Astral Foods

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

The idea behind Zoom Video Communications and Astral Foods Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.