Correlation Between BRITISH AMERICAN and ZCCM INVESTMENT
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By analyzing existing cross correlation between BRITISH AMERICAN TOBACCO ZAMBIA and ZCCM INVESTMENT HOLDINGS, you can compare the effects of market volatilities on BRITISH AMERICAN and ZCCM INVESTMENT 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 BRITISH AMERICAN with a short position of ZCCM INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRITISH AMERICAN and ZCCM INVESTMENT.
Diversification Opportunities for BRITISH AMERICAN and ZCCM INVESTMENT
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BRITISH and ZCCM is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BRITISH AMERICAN TOBACCO ZAMBI and ZCCM INVESTMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZCCM INVESTMENT HOLDINGS and BRITISH AMERICAN 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 BRITISH AMERICAN TOBACCO ZAMBIA are associated (or correlated) with ZCCM INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZCCM INVESTMENT HOLDINGS has no effect on the direction of BRITISH AMERICAN i.e., BRITISH AMERICAN and ZCCM INVESTMENT go up and down completely randomly.
Pair Corralation between BRITISH AMERICAN and ZCCM INVESTMENT
Assuming the 90 days trading horizon BRITISH AMERICAN TOBACCO ZAMBIA is expected to generate 0.69 times more return on investment than ZCCM INVESTMENT. However, BRITISH AMERICAN TOBACCO ZAMBIA is 1.45 times less risky than ZCCM INVESTMENT. It trades about 0.14 of its potential returns per unit of risk. ZCCM INVESTMENT HOLDINGS is currently generating about 0.09 per unit of risk. If you would invest 231.00 in BRITISH AMERICAN TOBACCO ZAMBIA on September 3, 2024 and sell it today you would earn a total of 109.00 from holding BRITISH AMERICAN TOBACCO ZAMBIA or generate 47.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRITISH AMERICAN TOBACCO ZAMBI vs. ZCCM INVESTMENT HOLDINGS
Performance |
| Timeline |
| BRITISH AMERICAN TOB |
| ZCCM INVESTMENT HOLDINGS |
BRITISH AMERICAN and ZCCM INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRITISH AMERICAN and ZCCM INVESTMENT
The main advantage of trading using opposite BRITISH AMERICAN and ZCCM INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRITISH AMERICAN position performs unexpectedly, ZCCM INVESTMENT 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 ZCCM INVESTMENT will offset losses from the drop in ZCCM INVESTMENT's long position.| BRITISH AMERICAN vs. STANDARD CHARTERED BANK | BRITISH AMERICAN vs. METAL FABRICATORS OF | BRITISH AMERICAN vs. AECI MINING EXPLOSIVES | BRITISH AMERICAN vs. ZAMBIA SUGAR PLC |
| ZCCM INVESTMENT vs. STANDARD CHARTERED BANK | ZCCM INVESTMENT vs. BRITISH AMERICAN TOBACCO ZAMBIA | ZCCM INVESTMENT vs. NATIONAL BREWERIES PLC | ZCCM INVESTMENT vs. ZAMBIAN BREWERIES PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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