Correlation Between Zoom Video and A SPAC

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

Diversification Opportunities for Zoom Video and A SPAC

-0.61

Correlation Coefficient

Zoom Video  A SPAC

Excellent diversification

The 3 months correlation between Zoom and ASPC is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and A SPAC III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC III 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 A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC III has no effect on the direction of Zoom Video i.e., Zoom Video and A SPAC go up and down completely randomly.

Pair Corralation between Zoom Video and A SPAC

Allowing for the 90-day total investment horizon Zoom Video Communications is expected to under-perform the A SPAC. In addition to that, Zoom Video is 8.16 times more volatile than A SPAC III. It trades about -0.12 of its total potential returns per unit of risk. A SPAC III is currently generating about 0.08 per unit of volatility. If you would invest  1,018  in A SPAC III on May 6, 2025 and sell it today you would earn a total of  8.00  from holding A SPAC III or generate 0.79% return on investment over 90 days.

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

Zoom Video Communications  vs.  A SPAC III

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 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.

A SPAC III

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in A SPAC III are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, A SPAC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Zoom Video and A SPAC

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

The idea behind Zoom Video Communications and A SPAC III 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.