Correlation Between NATIONAL BREWERIES and ZAMBIA SUGAR
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By analyzing existing cross correlation between NATIONAL BREWERIES PLC and ZAMBIA SUGAR PLC, you can compare the effects of market volatilities on NATIONAL BREWERIES and ZAMBIA SUGAR 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 NATIONAL BREWERIES with a short position of ZAMBIA SUGAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL BREWERIES and ZAMBIA SUGAR.
Diversification Opportunities for NATIONAL BREWERIES and ZAMBIA SUGAR
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NATIONAL and ZAMBIA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL BREWERIES PLC and ZAMBIA SUGAR PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZAMBIA SUGAR PLC and NATIONAL BREWERIES 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 NATIONAL BREWERIES PLC are associated (or correlated) with ZAMBIA SUGAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZAMBIA SUGAR PLC has no effect on the direction of NATIONAL BREWERIES i.e., NATIONAL BREWERIES and ZAMBIA SUGAR go up and down completely randomly.
Pair Corralation between NATIONAL BREWERIES and ZAMBIA SUGAR
Assuming the 90 days trading horizon NATIONAL BREWERIES PLC is expected to under-perform the ZAMBIA SUGAR. In addition to that, NATIONAL BREWERIES is 7.2 times more volatile than ZAMBIA SUGAR PLC. It trades about -0.22 of its total potential returns per unit of risk. ZAMBIA SUGAR PLC is currently generating about 0.23 per unit of volatility. If you would invest 3,500 in ZAMBIA SUGAR PLC on August 28, 2024 and sell it today you would earn a total of 109.00 from holding ZAMBIA SUGAR PLC or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NATIONAL BREWERIES PLC vs. ZAMBIA SUGAR PLC
Performance |
| Timeline |
| NATIONAL BREWERIES PLC |
| ZAMBIA SUGAR PLC |
NATIONAL BREWERIES and ZAMBIA SUGAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATIONAL BREWERIES and ZAMBIA SUGAR
The main advantage of trading using opposite NATIONAL BREWERIES and ZAMBIA SUGAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATIONAL BREWERIES position performs unexpectedly, ZAMBIA SUGAR 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 ZAMBIA SUGAR will offset losses from the drop in ZAMBIA SUGAR's long position.The idea behind NATIONAL BREWERIES PLC and ZAMBIA SUGAR PLC 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.| ZAMBIA SUGAR vs. AIRTEL NETWORKS ZAMBIA | ZAMBIA SUGAR vs. NATIONAL BREWERIES PLC | ZAMBIA SUGAR vs. ZAMBIA REINSURANCE 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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