Correlation Between Elevance Health, and Zoom Video

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

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

Diversification Opportunities for Elevance Health, and Zoom Video

-0.75

Correlation Coefficient

Elevance Health,  Zoom Video

Pay attention - limited upside

The 3 months correlation between Elevance and Zoom is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health, 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 Elevance Health, 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 Elevance Health, 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 Elevance Health, i.e., Elevance Health, and Zoom Video go up and down completely randomly.

Pair Corralation between Elevance Health, and Zoom Video

Assuming the 90 days trading horizon Elevance Health, is expected to under-perform the Zoom Video. But the stock apears to be less risky and, when comparing its historical volatility, Elevance Health, is 1.34 times less risky than Zoom Video. The stock trades about -0.12 of its potential returns per unit of risk. The Zoom Video Communications is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,482  in Zoom Video Communications on October 4, 2024 and sell it today you would earn a total of  529.00  from holding Zoom Video Communications or generate 35.7% return on investment over 90 days.

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

Elevance Health,  vs.  Zoom Video Communications

Elevance Health,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elevance Health, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Zoom Video Communications

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Zoom Video sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elevance Health, and Zoom Video

The main advantage of trading using opposite Elevance Health, and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health, 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 Elevance Health, 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.