Correlation Between ZB FINANCIAL and SEED
Can any of the company-specific risk be diversified away by investing in both ZB FINANCIAL and SEED 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 SEED 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 SEED LIMITED, you can compare the effects of market volatilities on ZB FINANCIAL and SEED 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 SEED. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZB FINANCIAL and SEED.
Diversification Opportunities for ZB FINANCIAL and SEED
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZBFH and SEED is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ZB FINANCIAL HOLDINGS and SEED LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEED LIMITED 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 SEED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEED LIMITED has no effect on the direction of ZB FINANCIAL i.e., ZB FINANCIAL and SEED go up and down completely randomly.
Pair Corralation between ZB FINANCIAL and SEED
Assuming the 90 days trading horizon ZB FINANCIAL HOLDINGS is expected to generate 0.97 times more return on investment than SEED. However, ZB FINANCIAL HOLDINGS is 1.03 times less risky than SEED. It trades about 0.0 of its potential returns per unit of risk. SEED LIMITED is currently generating about -0.22 per unit of risk. If you would invest 48,000 in ZB FINANCIAL HOLDINGS on November 5, 2024 and sell it today you would lose (1,000.00) from holding ZB FINANCIAL HOLDINGS or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
ZB FINANCIAL HOLDINGS vs. SEED LIMITED
Performance |
| Timeline |
| ZB FINANCIAL HOLDINGS |
| SEED LIMITED |
ZB FINANCIAL and SEED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZB FINANCIAL and SEED
The main advantage of trading using opposite ZB FINANCIAL and SEED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZB FINANCIAL position performs unexpectedly, SEED 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 SEED will offset losses from the drop in SEED's long position.| ZB FINANCIAL vs. FIRST MUTUAL PROPERTIES | ZB FINANCIAL vs. BRITISH AMERICAN TOBACCO | ZB FINANCIAL vs. TANGANDA TEA PANY | ZB FINANCIAL vs. Cass Saddle Agriculture |
| SEED vs. STAR AFRICA PORATION | SEED vs. CAFCA LIMITED | SEED vs. FIRST MUTUAL PROPERTIES | SEED vs. AFRICAN DISTILLERS LIMITED |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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