Correlation Between NVR and Zoom Video
Can any of the company-specific risk be diversified away by investing in both NVR 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 NVR and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVR Inc and Zoom Video Communications, you can compare the effects of market volatilities on NVR 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 NVR with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVR and Zoom Video.
Diversification Opportunities for NVR and Zoom Video
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between NVR and Zoom is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NVR Inc 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 NVR 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 NVR Inc 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 NVR i.e., NVR and Zoom Video go up and down completely randomly.
Pair Corralation between NVR and Zoom Video
Assuming the 90 days horizon NVR Inc is expected to under-perform the Zoom Video. But the stock apears to be less risky and, when comparing its historical volatility, NVR Inc is 1.59 times less risky than Zoom Video. The stock trades about -0.19 of its potential returns per unit of risk. The Zoom Video Communications is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 7,928 in Zoom Video Communications on December 2, 2024 and sell it today you would lose (935.00) from holding Zoom Video Communications or give up 11.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NVR Inc vs. Zoom Video Communications
Performance |
Timeline |
NVR Inc |
Zoom Video Communications |
NVR and Zoom Video Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NVR and Zoom Video
The main advantage of trading using opposite NVR and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVR 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.NVR vs. FLOW TRADERS LTD | NVR vs. AUTO TRADER ADR | NVR vs. Canon Marketing Japan | NVR vs. British American Tobacco |
Zoom Video vs. Insurance Australia Group | Zoom Video vs. Phibro Animal Health | Zoom Video vs. EPSILON HEALTHCARE LTD | Zoom Video vs. COMM HEALTH SYSTEMS |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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