Correlation Between Zimplats Holdings and Capitan Mining
Can any of the company-specific risk be diversified away by investing in both Zimplats Holdings and Capitan Mining 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 Zimplats Holdings and Capitan Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zimplats Holdings Limited and Capitan Mining, you can compare the effects of market volatilities on Zimplats Holdings and Capitan Mining 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 Zimplats Holdings with a short position of Capitan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimplats Holdings and Capitan Mining.
Diversification Opportunities for Zimplats Holdings and Capitan Mining
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zimplats and Capitan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zimplats Holdings Limited and Capitan Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitan Mining and Zimplats Holdings 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 Zimplats Holdings Limited are associated (or correlated) with Capitan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitan Mining has no effect on the direction of Zimplats Holdings i.e., Zimplats Holdings and Capitan Mining go up and down completely randomly.
Pair Corralation between Zimplats Holdings and Capitan Mining
Assuming the 90 days horizon Zimplats Holdings Limited is expected to under-perform the Capitan Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Zimplats Holdings Limited is 2.96 times less risky than Capitan Mining. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Capitan Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Capitan Mining on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Capitan Mining or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Zimplats Holdings Limited vs. Capitan Mining
Performance |
| Timeline |
| Zimplats Holdings |
| Capitan Mining |
Zimplats Holdings and Capitan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zimplats Holdings and Capitan Mining
The main advantage of trading using opposite Zimplats Holdings and Capitan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zimplats Holdings position performs unexpectedly, Capitan Mining 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 Capitan Mining will offset losses from the drop in Capitan Mining's long position.| Zimplats Holdings vs. Defiance Silver Corp | Zimplats Holdings vs. HUMANA INC | Zimplats Holdings vs. SCOR PK | Zimplats Holdings vs. Aquagold International |
| Capitan Mining vs. Cartier Iron Corp | Capitan Mining vs. Alien Metals | Capitan Mining vs. Arctic Star Exploration | Capitan Mining vs. Denarius Silver Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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