Correlation Between MADISON FINANCIAL and ZCCM INVESTMENT
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By analyzing existing cross correlation between MADISON FINANCIAL SERVICES and ZCCM INVESTMENT HOLDINGS, you can compare the effects of market volatilities on MADISON FINANCIAL 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 MADISON FINANCIAL with a short position of ZCCM INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of MADISON FINANCIAL and ZCCM INVESTMENT.
Diversification Opportunities for MADISON FINANCIAL and ZCCM INVESTMENT
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MADISON and ZCCM is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding MADISON FINANCIAL SERVICES 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 MADISON FINANCIAL 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 MADISON FINANCIAL SERVICES 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 MADISON FINANCIAL i.e., MADISON FINANCIAL and ZCCM INVESTMENT go up and down completely randomly.
Pair Corralation between MADISON FINANCIAL and ZCCM INVESTMENT
Assuming the 90 days trading horizon MADISON FINANCIAL SERVICES is expected to under-perform the ZCCM INVESTMENT. But the stock apears to be less risky and, when comparing its historical volatility, MADISON FINANCIAL SERVICES is 13.31 times less risky than ZCCM INVESTMENT. The stock trades about -0.04 of its potential returns per unit of risk. The ZCCM INVESTMENT HOLDINGS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,200 in ZCCM INVESTMENT HOLDINGS on September 2, 2024 and sell it today you would earn a total of 2,300 from holding ZCCM INVESTMENT HOLDINGS or generate 54.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MADISON FINANCIAL SERVICES vs. ZCCM INVESTMENT HOLDINGS
Performance |
| Timeline |
| MADISON FINANCIAL |
| ZCCM INVESTMENT HOLDINGS |
MADISON FINANCIAL and ZCCM INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MADISON FINANCIAL and ZCCM INVESTMENT
The main advantage of trading using opposite MADISON FINANCIAL and ZCCM INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MADISON FINANCIAL 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.| MADISON FINANCIAL vs. AECI MINING EXPLOSIVES | MADISON FINANCIAL vs. BRITISH AMERICAN TOBACCO ZAMBIA | MADISON FINANCIAL vs. AIRTEL NETWORKS ZAMBIA | MADISON FINANCIAL vs. NATIONAL BREWERIES PLC |
| ZCCM INVESTMENT vs. AECI MINING EXPLOSIVES | ZCCM INVESTMENT vs. BRITISH AMERICAN TOBACCO ZAMBIA | ZCCM INVESTMENT vs. AIRTEL NETWORKS ZAMBIA | ZCCM INVESTMENT vs. NATIONAL 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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