Correlation Between Cass Saddle and ZB FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Cass Saddle and ZB FINANCIAL 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 Cass Saddle and ZB FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Saddle Agriculture and ZB FINANCIAL HOLDINGS, you can compare the effects of market volatilities on Cass Saddle and ZB FINANCIAL 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 Cass Saddle with a short position of ZB FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Saddle and ZB FINANCIAL.
Diversification Opportunities for Cass Saddle and ZB FINANCIAL
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cass and ZBFH is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cass Saddle Agriculture and ZB FINANCIAL HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZB FINANCIAL HOLDINGS and Cass Saddle 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 Cass Saddle Agriculture are associated (or correlated) with ZB FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZB FINANCIAL HOLDINGS has no effect on the direction of Cass Saddle i.e., Cass Saddle and ZB FINANCIAL go up and down completely randomly.
Pair Corralation between Cass Saddle and ZB FINANCIAL
Assuming the 90 days trading horizon Cass Saddle Agriculture is expected to generate 1.0 times more return on investment than ZB FINANCIAL. However, Cass Saddle is 1.0 times more volatile than ZB FINANCIAL HOLDINGS. It trades about 0.51 of its potential returns per unit of risk. ZB FINANCIAL HOLDINGS is currently generating about -0.22 per unit of risk. If you would invest 500.00 in Cass Saddle Agriculture on November 28, 2024 and sell it today you would earn a total of 400.00 from holding Cass Saddle Agriculture or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Saddle Agriculture vs. ZB FINANCIAL HOLDINGS
Performance |
| Timeline |
| Cass Saddle Agriculture |
| ZB FINANCIAL HOLDINGS |
Cass Saddle and ZB FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Saddle and ZB FINANCIAL
The main advantage of trading using opposite Cass Saddle and ZB FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Saddle position performs unexpectedly, ZB FINANCIAL 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 ZB FINANCIAL will offset losses from the drop in ZB FINANCIAL's long position.| Cass Saddle vs. RIO ZIM LIMITED | Cass Saddle vs. Tigere Real Estate | Cass Saddle vs. STAR AFRICA PORATION | Cass Saddle vs. Datvest Modified Consumer |
| ZB FINANCIAL vs. RIO ZIM LIMITED | ZB FINANCIAL vs. Tigere Real Estate | ZB FINANCIAL vs. STAR AFRICA PORATION | ZB FINANCIAL vs. Datvest Modified Consumer |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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