Correlation Between Zoom Video and Fresenius

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

Diversification Opportunities for Zoom Video and Fresenius

-0.55

Correlation Coefficient

Zoom Video  Fresenius

Excellent diversification

The 3 months correlation between Zoom and Fresenius is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius 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 Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of Zoom Video i.e., Zoom Video and Fresenius go up and down completely randomly.

Pair Corralation between Zoom Video and Fresenius

Assuming the 90 days trading horizon Zoom Video Communications is expected to under-perform the Fresenius. In addition to that, Zoom Video is 1.62 times more volatile than Fresenius SE Co. It trades about -0.1 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about 0.19 per unit of volatility. If you would invest  3,348  in Fresenius SE Co on December 25, 2024 and sell it today you would earn a total of  583.00  from holding Fresenius SE Co or generate 17.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Zoom Video Communications  vs.  Fresenius SE Co

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fresenius SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius SE Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Fresenius unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zoom Video and Fresenius

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

The idea behind Zoom Video Communications and Fresenius SE Co 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.