Correlation Between OK ZIMBABWE and FIRST MUTUAL
Can any of the company-specific risk be diversified away by investing in both OK ZIMBABWE and FIRST MUTUAL 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 OK ZIMBABWE and FIRST MUTUAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OK ZIMBABWE LIMITED and FIRST MUTUAL PROPERTIES, you can compare the effects of market volatilities on OK ZIMBABWE and FIRST MUTUAL 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 OK ZIMBABWE with a short position of FIRST MUTUAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of OK ZIMBABWE and FIRST MUTUAL.
Diversification Opportunities for OK ZIMBABWE and FIRST MUTUAL
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OKZ and FIRST is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding OK ZIMBABWE LIMITED and FIRST MUTUAL PROPERTIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST MUTUAL PROPERTIES and OK ZIMBABWE 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 OK ZIMBABWE LIMITED are associated (or correlated) with FIRST MUTUAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST MUTUAL PROPERTIES has no effect on the direction of OK ZIMBABWE i.e., OK ZIMBABWE and FIRST MUTUAL go up and down completely randomly.
Pair Corralation between OK ZIMBABWE and FIRST MUTUAL
Assuming the 90 days trading horizon OK ZIMBABWE LIMITED is expected to under-perform the FIRST MUTUAL. In addition to that, OK ZIMBABWE is 1.05 times more volatile than FIRST MUTUAL PROPERTIES. It trades about -0.15 of its total potential returns per unit of risk. FIRST MUTUAL PROPERTIES is currently generating about 0.16 per unit of volatility. If you would invest 7,950 in FIRST MUTUAL PROPERTIES on August 30, 2024 and sell it today you would earn a total of 1,550 from holding FIRST MUTUAL PROPERTIES or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OK ZIMBABWE LIMITED vs. FIRST MUTUAL PROPERTIES
Performance |
| Timeline |
| OK ZIMBABWE LIMITED |
| FIRST MUTUAL PROPERTIES |
OK ZIMBABWE and FIRST MUTUAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OK ZIMBABWE and FIRST MUTUAL
The main advantage of trading using opposite OK ZIMBABWE and FIRST MUTUAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OK ZIMBABWE position performs unexpectedly, FIRST MUTUAL 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 FIRST MUTUAL will offset losses from the drop in FIRST MUTUAL's long position.| OK ZIMBABWE vs. FIRST MUTUAL PROPERTIES | OK ZIMBABWE vs. BRITISH AMERICAN TOBACCO | OK ZIMBABWE vs. TANGANDA TEA PANY | OK ZIMBABWE vs. ZB FINANCIAL HOLDINGS |
| FIRST MUTUAL vs. BRITISH AMERICAN TOBACCO | FIRST MUTUAL vs. TANGANDA TEA PANY | FIRST MUTUAL vs. ZB FINANCIAL HOLDINGS | FIRST MUTUAL vs. Cass Saddle Agriculture |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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