Correlation Between Zoom Video and Wolters Kluwer

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

Diversification Opportunities for Zoom Video and Wolters Kluwer

0.57

Correlation Coefficient

Zoom Video  Wolters Kluwer

Very weak diversification

The 3 months correlation between Zoom and Wolters is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Wolters Kluwer NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolters Kluwer NV 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 Wolters Kluwer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolters Kluwer NV has no effect on the direction of Zoom Video i.e., Zoom Video and Wolters Kluwer go up and down completely randomly.

Pair Corralation between Zoom Video and Wolters Kluwer

Assuming the 90 days trading horizon Zoom Video Communications is expected to generate 2.0 times more return on investment than Wolters Kluwer. However, Zoom Video is 2.0 times more volatile than Wolters Kluwer NV. It trades about -0.06 of its potential returns per unit of risk. Wolters Kluwer NV is currently generating about -0.2 per unit of risk. If you would invest  8,173  in Zoom Video Communications on October 9, 2024 and sell it today you would lose (169.00) from holding Zoom Video Communications or give up 2.07% of portfolio value over 90 days.

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

Zoom Video Communications  vs.  Wolters Kluwer NV

Zoom Video Communications

Risk-Adjusted Performance

14 of 100

Good

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

Wolters Kluwer NV

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wolters Kluwer NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Wolters Kluwer is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Zoom Video and Wolters Kluwer

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

The idea behind Zoom Video Communications and Wolters Kluwer NV 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.