Correlation Between A2Z Smart and Zoom Video

Can any of the company-specific risk be diversified away by investing in both A2Z Smart 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 A2Z Smart and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A2Z Smart Technologies and Zoom Video Communications, you can compare the effects of market volatilities on A2Z Smart 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 A2Z Smart with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of A2Z Smart and Zoom Video.

Diversification Opportunities for A2Z Smart and Zoom Video

0.92

Correlation Coefficient

A2Z Smart  Zoom Video

Almost no diversification

The 3 months correlation between A2Z and Zoom is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding A2Z Smart Technologies 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 A2Z Smart 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 A2Z Smart Technologies 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 A2Z Smart i.e., A2Z Smart and Zoom Video go up and down completely randomly.

Pair Corralation between A2Z Smart and Zoom Video

Allowing for the 90-day total investment horizon A2Z Smart Technologies is expected to generate 2.1 times more return on investment than Zoom Video. However, A2Z Smart is 2.1 times more volatile than Zoom Video Communications. It trades about 0.0 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.09 per unit of risk. If you would invest  700.00  in A2Z Smart Technologies on October 8, 2024 and sell it today you would lose (7.00) from holding A2Z Smart Technologies or give up 1.0% of portfolio value over 90 days.

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

A2Z Smart Technologies  vs.  Zoom Video Communications

A2Z Smart Technologies

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in A2Z Smart Technologies are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, A2Z Smart showed solid returns over the last few months and may actually be approaching a breakup point.

Zoom Video Communications

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent primary indicators, Zoom Video displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with A2Z Smart and Zoom Video

The main advantage of trading using opposite A2Z Smart and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A2Z Smart 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 A2Z Smart Technologies 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.