Correlation Between SmartSet Automation and Zoom Video

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

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

Diversification Opportunities for SmartSet Automation and Zoom Video

-0.24

Correlation Coefficient

SmartSet Automation  Zoom Video

Very good diversification

The 3 months correlation between SmartSet and Zoom is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SmartSet Automation LLC 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 SmartSet Automation 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 SmartSet Automation LLC 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 SmartSet Automation i.e., SmartSet Automation and Zoom Video go up and down completely randomly.

Pair Corralation between SmartSet Automation and Zoom Video

Given the investment horizon of 90 days SmartSet Automation LLC is expected to generate 14.31 times more return on investment than Zoom Video. However, SmartSet Automation is 14.31 times more volatile than Zoom Video Communications. It trades about 0.05 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.04 per unit of risk. If you would invest  0.26  in SmartSet Automation LLC on April 30, 2025 and sell it today you would lose (0.06) from holding SmartSet Automation LLC or give up 23.08% of portfolio value over 90 days.

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

SmartSet Automation LLC  vs.  Zoom Video Communications

SmartSet Automation LLC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SmartSet Automation LLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, SmartSet Automation exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 very healthy primary indicators, Zoom Video is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SmartSet Automation and Zoom Video

The main advantage of trading using opposite SmartSet Automation and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartSet Automation 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 SmartSet Automation LLC 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.