Correlation Between Zoom Video and Swatch Group
Can any of the company-specific risk be diversified away by investing in both Zoom Video and Swatch Group 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 Swatch Group 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 The Swatch Group, you can compare the effects of market volatilities on Zoom Video and Swatch Group 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 Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and Swatch Group.
Diversification Opportunities for Zoom Video and Swatch Group
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zoom and Swatch is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and The Swatch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group 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 Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group has no effect on the direction of Zoom Video i.e., Zoom Video and Swatch Group go up and down completely randomly.
Pair Corralation between Zoom Video and Swatch Group
Assuming the 90 days trading horizon Zoom Video Communications is expected to under-perform the Swatch Group. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 1.28 times less risky than Swatch Group. The stock trades about -0.11 of its potential returns per unit of risk. The The Swatch Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 815.00 in The Swatch Group on December 22, 2024 and sell it today you would lose (15.00) from holding The Swatch Group or give up 1.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Zoom Video Communications vs. The Swatch Group
Performance |
Timeline |
Zoom Video Communications |
Swatch Group |
Zoom Video and Swatch Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zoom Video and Swatch Group
The main advantage of trading using opposite Zoom Video and Swatch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Swatch Group 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 Swatch Group will offset losses from the drop in Swatch Group's long position.Zoom Video vs. TIANDE CHEMICAL | Zoom Video vs. Tyson Foods | Zoom Video vs. AUSNUTRIA DAIRY | Zoom Video vs. Sekisui Chemical Co |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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