Correlation Between Zoom Video and CAVA Group,

Can any of the company-specific risk be diversified away by investing in both Zoom Video and CAVA Group, 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 CAVA Group, 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 CAVA Group,, you can compare the effects of market volatilities on Zoom Video and CAVA Group, 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 CAVA Group,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zoom Video and CAVA Group,.

Diversification Opportunities for Zoom Video and CAVA Group,

0.18

Correlation Coefficient

Zoom Video  CAVA Group,

Average diversification

The 3 months correlation between Zoom and CAVA is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Zoom Video i.e., Zoom Video and CAVA Group, go up and down completely randomly.

Pair Corralation between Zoom Video and CAVA Group,

Allowing for the 90-day total investment horizon Zoom Video Communications is expected to generate 0.68 times more return on investment than CAVA Group,. However, Zoom Video Communications is 1.47 times less risky than CAVA Group,. It trades about 0.14 of its potential returns per unit of risk. CAVA Group, is currently generating about 0.06 per unit of risk. If you would invest  5,921  in Zoom Video Communications on September 29, 2024 and sell it today you would earn a total of  2,461  from holding Zoom Video Communications or generate 41.56% return on investment over 90 days.

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

Zoom Video Communications  vs.  CAVA Group,

Zoom Video Communications

Risk-Adjusted Performance

11 of 100

Good

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

CAVA Group,

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zoom Video and CAVA Group,

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

The idea behind Zoom Video Communications and CAVA Group, 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.