Correlation Between Zoom Video and Meridian Bancorp

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

Diversification Opportunities for Zoom Video and Meridian Bancorp

0.0

Correlation Coefficient

Zoom Video  Meridian Bancorp

Pay attention - limited upside

The 3 months correlation between Zoom and Meridian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and Meridian Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Bancorp 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 Meridian Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Bancorp has no effect on the direction of Zoom Video i.e., Zoom Video and Meridian Bancorp go up and down completely randomly.

Pair Corralation between Zoom Video and Meridian Bancorp

If you would invest (100.00) in Meridian Bancorp on March 1, 2024 and sell it today you would earn a total of  100.00  from holding Meridian Bancorp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Zoom Video Communications  vs.  Meridian Bancorp

Zoom Video Communications

Risk-Adjusted Performance

0 of 100

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 inconsistent performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Meridian Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meridian Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Meridian Bancorp 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 Meridian Bancorp

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

The idea behind Zoom Video Communications and Meridian Bancorp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..