Correlation Between Apple and ZoomInfo Technologies

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

By analyzing existing cross correlation between Apple Inc and ZoomInfo Technologies, you can compare the effects of market volatilities on Apple and ZoomInfo Technologies 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 Apple with a short position of ZoomInfo Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and ZoomInfo Technologies.

Diversification Opportunities for Apple and ZoomInfo Technologies

0.5

Correlation Coefficient

Apple  ZoomInfo Technologies

Very weak diversification

The 3 months correlation between Apple and ZoomInfo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and ZoomInfo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZoomInfo Technologies and Apple 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 Apple Inc are associated (or correlated) with ZoomInfo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZoomInfo Technologies has no effect on the direction of Apple i.e., Apple and ZoomInfo Technologies go up and down completely randomly.

Pair Corralation between Apple and ZoomInfo Technologies

Assuming the 90 days trading horizon Apple Inc is expected to generate 0.49 times more return on investment than ZoomInfo Technologies. However, Apple Inc is 2.03 times less risky than ZoomInfo Technologies. It trades about 0.04 of its potential returns per unit of risk. ZoomInfo Technologies is currently generating about -0.01 per unit of risk. If you would invest  6,725  in Apple Inc on October 22, 2024 and sell it today you would earn a total of  222.00  from holding Apple Inc or generate 3.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.92%
Values	Daily Returns

Apple Inc  vs.  ZoomInfo Technologies

Apple Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Apple is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ZoomInfo Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZoomInfo Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, ZoomInfo Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apple and ZoomInfo Technologies

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

The idea behind Apple Inc and ZoomInfo Technologies 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.