Correlation Between Contextlogic and Zoom Video

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

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

Diversification Opportunities for Contextlogic and Zoom Video

-0.43

Correlation Coefficient

Contextlogic  Zoom Video

Very good diversification

The 3 months correlation between Contextlogic and Zoom is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Contextlogic 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 Contextlogic 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 Contextlogic 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 Contextlogic i.e., Contextlogic and Zoom Video go up and down completely randomly.

Pair Corralation between Contextlogic and Zoom Video

Given the investment horizon of 90 days Contextlogic is expected to generate 3.48 times more return on investment than Zoom Video. However, Contextlogic is 3.48 times more volatile than Zoom Video Communications. It trades about -0.03 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.15 per unit of risk. If you would invest  785.00  in Contextlogic on May 18, 2025 and sell it today you would lose (46.00) from holding Contextlogic or give up 5.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	38.1%
Values	Daily Returns

Contextlogic  vs.  Zoom Video Communications

Contextlogic

Risk-Adjusted Performance

Weakest

Over the last 90 days Contextlogic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Zoom Video Communications

Risk-Adjusted Performance

Weakest

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 latest inconsistent performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Contextlogic and Zoom Video

The main advantage of trading using opposite Contextlogic and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contextlogic 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 Contextlogic 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.