Correlation Between ZB FINANCIAL and ECONET WIRELESS
Can any of the company-specific risk be diversified away by investing in both ZB FINANCIAL and ECONET WIRELESS 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 ZB FINANCIAL and ECONET WIRELESS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZB FINANCIAL HOLDINGS and ECONET WIRELESS HOLDINGS, you can compare the effects of market volatilities on ZB FINANCIAL and ECONET WIRELESS 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 ZB FINANCIAL with a short position of ECONET WIRELESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZB FINANCIAL and ECONET WIRELESS.
Diversification Opportunities for ZB FINANCIAL and ECONET WIRELESS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ZBFH and ECONET is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ZB FINANCIAL HOLDINGS and ECONET WIRELESS HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECONET WIRELESS HOLDINGS and ZB 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 ZB FINANCIAL HOLDINGS are associated (or correlated) with ECONET WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECONET WIRELESS HOLDINGS has no effect on the direction of ZB FINANCIAL i.e., ZB FINANCIAL and ECONET WIRELESS go up and down completely randomly.
Pair Corralation between ZB FINANCIAL and ECONET WIRELESS
If you would invest 25,794 in ECONET WIRELESS HOLDINGS on October 20, 2024 and sell it today you would earn a total of 3,923 from holding ECONET WIRELESS HOLDINGS or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
ZB FINANCIAL HOLDINGS vs. ECONET WIRELESS HOLDINGS
Performance |
| Timeline |
| ZB FINANCIAL HOLDINGS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ECONET WIRELESS HOLDINGS |
ZB FINANCIAL and ECONET WIRELESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZB FINANCIAL and ECONET WIRELESS
The main advantage of trading using opposite ZB FINANCIAL and ECONET WIRELESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZB FINANCIAL position performs unexpectedly, ECONET WIRELESS 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 ECONET WIRELESS will offset losses from the drop in ECONET WIRELESS's long position.| ZB FINANCIAL vs. STAR AFRICA PORATION | ZB FINANCIAL vs. CAFCA LIMITED | ZB FINANCIAL vs. FIRST MUTUAL PROPERTIES | ZB FINANCIAL vs. AFRICAN DISTILLERS LIMITED |
| ECONET WIRELESS vs. Morgan Co Multi | ECONET WIRELESS vs. TANGANDA TEA PANY | ECONET WIRELESS vs. Revitus Property Opportunities | ECONET WIRELESS vs. FIRST MUTUAL PROPERTIES |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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