Correlation Between John Wood and Zoom Video
Can any of the company-specific risk be diversified away by investing in both John Wood 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 John Wood and Zoom Video into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Wood Group and Zoom Video Communications, you can compare the effects of market volatilities on John Wood 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 John Wood with a short position of Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Wood and Zoom Video.
Diversification Opportunities for John Wood and Zoom Video
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between John and Zoom is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding John Wood Group 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 John Wood 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 John Wood Group 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 John Wood i.e., John Wood and Zoom Video go up and down completely randomly.
Pair Corralation between John Wood and Zoom Video
Assuming the 90 days trading horizon John Wood Group is expected to under-perform the Zoom Video. In addition to that, John Wood is 5.97 times more volatile than Zoom Video Communications. It trades about -0.01 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about 0.0 per unit of volatility. If you would invest 8,360 in Zoom Video Communications on December 4, 2024 and sell it today you would lose (75.00) from holding Zoom Video Communications or give up 0.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 93.55% |
Values | Daily Returns |
John Wood Group vs. Zoom Video Communications
Performance |
Timeline |
John Wood Group |
Zoom Video Communications |
John Wood and Zoom Video Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John Wood and Zoom Video
The main advantage of trading using opposite John Wood and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Wood 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.John Wood vs. Hochschild Mining plc | John Wood vs. Endeavour Mining Corp | John Wood vs. McEwen Mining | John Wood vs. Coeur Mining |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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