Correlation Between STAG Industrial, and Zoom Video

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

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

Diversification Opportunities for STAG Industrial, and Zoom Video

0.36

Correlation Coefficient

STAG Industrial,  Zoom Video

Weak diversification

The 3 months correlation between STAG and Zoom is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial, 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 STAG Industrial, 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 STAG Industrial, 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 STAG Industrial, i.e., STAG Industrial, and Zoom Video go up and down completely randomly.

Pair Corralation between STAG Industrial, and Zoom Video

Assuming the 90 days trading horizon STAG Industrial, is expected to under-perform the Zoom Video. In addition to that, STAG Industrial, is 1.02 times more volatile than Zoom Video Communications. It trades about -0.21 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about 0.01 per unit of volatility. If you would invest  2,013  in Zoom Video Communications on October 4, 2024 and sell it today you would lose (2.00) from holding Zoom Video Communications or give up 0.1% of portfolio value over 90 days.

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

STAG Industrial,  vs.  Zoom Video Communications

STAG Industrial,

Risk-Adjusted Performance

0 of 100

Very Weak

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

The main advantage of trading using opposite STAG Industrial, and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial, 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 STAG Industrial, 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.