Correlation Between HELIOS TECHS and Zoom Video

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

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

Diversification Opportunities for HELIOS TECHS and Zoom Video

0.46

Correlation Coefficient

HELIOS TECHS  Zoom Video

Very weak diversification

The 3 months correlation between HELIOS and Zoom is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding HELIOS TECHS 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 HELIOS TECHS 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 HELIOS TECHS 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 HELIOS TECHS i.e., HELIOS TECHS and Zoom Video go up and down completely randomly.

Pair Corralation between HELIOS TECHS and Zoom Video

Assuming the 90 days horizon HELIOS TECHS INC is expected to under-perform the Zoom Video. But the stock apears to be less risky and, when comparing its historical volatility, HELIOS TECHS INC is 1.11 times less risky than Zoom Video. The stock trades about -0.25 of its potential returns per unit of risk. The Zoom Video Communications is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  8,157  in Zoom Video Communications on December 21, 2024 and sell it today you would lose (1,272) from holding Zoom Video Communications or give up 15.59% of portfolio value over 90 days.

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

HELIOS TECHS INC  vs.  Zoom Video Communications

HELIOS TECHS INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days HELIOS TECHS INC 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 basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Zoom Video Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoom Video Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with HELIOS TECHS and Zoom Video

The main advantage of trading using opposite HELIOS TECHS and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HELIOS TECHS 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 HELIOS TECHS INC 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.