Correlation Between BEXIMCO PHARMAGDR and Zoom Video

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

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

Diversification Opportunities for BEXIMCO PHARMAGDR and Zoom Video

0.9

Correlation Coefficient

BEXIMCO PHARMAGDR  Zoom Video

Almost no diversification

The 3 months correlation between BEXIMCO and Zoom is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding BEXIMCO PHARMAGDR REGS 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 BEXIMCO PHARMAGDR 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 BEXIMCO PHARMAGDR REGS 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 BEXIMCO PHARMAGDR i.e., BEXIMCO PHARMAGDR and Zoom Video go up and down completely randomly.

Pair Corralation between BEXIMCO PHARMAGDR and Zoom Video

Assuming the 90 days trading horizon BEXIMCO PHARMAGDR is expected to generate 1.26 times less return on investment than Zoom Video. In addition to that, BEXIMCO PHARMAGDR is 1.84 times more volatile than Zoom Video Communications. It trades about 0.02 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about 0.04 per unit of volatility. If you would invest  6,803  in Zoom Video Communications on October 3, 2024 and sell it today you would earn a total of  1,172  from holding Zoom Video Communications or generate 17.23% return on investment over 90 days.

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

BEXIMCO PHARMAGDR REGS  vs.  Zoom Video Communications

BEXIMCO PHARMAGDR REGS

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BEXIMCO PHARMAGDR REGS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BEXIMCO PHARMAGDR reported solid returns over the last few months and may actually be approaching a breakup point.

Zoom Video Communications

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zoom Video unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BEXIMCO PHARMAGDR and Zoom Video

The main advantage of trading using opposite BEXIMCO PHARMAGDR and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEXIMCO PHARMAGDR 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 BEXIMCO PHARMAGDR REGS 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.