Correlation Between Elis SA and Zoom Video

Can any of the company-specific risk be diversified away by investing in both Elis SA and Zoom Video 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 Elis SA and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Elis SA and Zoom Video Communications, you can compare the effects of market volatilities on Elis SA and Zoom Video 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 Elis SA with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elis SA and Zoom Video.

Diversification Opportunities for Elis SA and Zoom Video

-0.46

Correlation Coefficient

Elis SA  Zoom Video

Very good diversification

The 3 months correlation between Elis and Zoom is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Elis SA and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications and Elis SA 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 Elis SA are associated (or correlated) with Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Elis SA i.e., Elis SA and Zoom Video go up and down completely randomly.

Pair Corralation between Elis SA and Zoom Video

Assuming the 90 days horizon Elis SA is expected to generate 0.79 times more return on investment than Zoom Video. However, Elis SA is 1.26 times less risky than Zoom Video. It trades about 0.18 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.12 per unit of risk. If you would invest  1,815  in Elis SA on December 20, 2024 and sell it today you would earn a total of  383.00  from holding Elis SA or generate 21.1% return on investment over 90 days.

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

Elis SA  vs.  Zoom Video Communications

Elis SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Elis SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Elis SA reported solid returns over the last few months and may actually be approaching a breakup point.

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 fragile 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.

Pair Trading with Elis SA and Zoom Video

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

The idea behind Elis SA and Zoom Video Communications 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.