Correlation Between Zoom Video and Asana

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

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

Diversification Opportunities for Zoom Video and Asana

0.66

Correlation Coefficient

Zoom Video  Asana

Poor diversification

The 3 months correlation between Zoom and Asana is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Asana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asana Inc and Zoom Video 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 Zoom Video Communications are associated (or correlated) with Asana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asana Inc has no effect on the direction of Zoom Video i.e., Zoom Video and Asana go up and down completely randomly.

Pair Corralation between Zoom Video and Asana

Allowing for the 90-day total investment horizon Zoom Video Communications is expected to under-perform the Asana. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 3.78 times less risky than Asana. The stock trades about -0.44 of its potential returns per unit of risk. The Asana Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,147  in Asana Inc on October 23, 2024 and sell it today you would lose (77.00) from holding Asana Inc or give up 3.59% of portfolio value over 90 days.

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

Zoom Video Communications  vs.  Asana Inc

Zoom Video Communications

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent primary indicators, Zoom Video may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Asana Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asana Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Asana displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zoom Video and Asana

The main advantage of trading using opposite Zoom Video and Asana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video position performs unexpectedly, Asana 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 Asana will offset losses from the drop in Asana's long position.

The idea behind Zoom Video Communications and Asana Inc 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 Anywhere module to track or share privately all of your investments from the convenience of any device.