Correlation Between Bilendi and ZCCM Investments

Can any of the company-specific risk be diversified away by investing in both Bilendi and ZCCM Investments 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 Bilendi and ZCCM Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bilendi and ZCCM Investments Holdings, you can compare the effects of market volatilities on Bilendi and ZCCM Investments 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 Bilendi with a short position of ZCCM Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilendi and ZCCM Investments.

Diversification Opportunities for Bilendi and ZCCM Investments

-0.65

Correlation Coefficient

Bilendi  ZCCM Investments

Excellent diversification

The 3 months correlation between Bilendi and ZCCM is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bilendi and ZCCM Investments Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZCCM Investments Holdings and Bilendi 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 Bilendi are associated (or correlated) with ZCCM Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZCCM Investments Holdings has no effect on the direction of Bilendi i.e., Bilendi and ZCCM Investments go up and down completely randomly.

Pair Corralation between Bilendi and ZCCM Investments

Assuming the 90 days trading horizon Bilendi is expected to under-perform the ZCCM Investments. In addition to that, Bilendi is 1.02 times more volatile than ZCCM Investments Holdings. It trades about -0.05 of its total potential returns per unit of risk. ZCCM Investments Holdings is currently generating about 0.0 per unit of volatility. If you would invest  136.00  in ZCCM Investments Holdings on September 12, 2024 and sell it today you would lose (2.00) from holding ZCCM Investments Holdings or give up 1.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Bilendi  vs.  ZCCM Investments Holdings

Bilendi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bilendi has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

ZCCM Investments Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZCCM Investments Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ZCCM Investments is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bilendi and ZCCM Investments

The main advantage of trading using opposite Bilendi and ZCCM Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilendi position performs unexpectedly, ZCCM Investments 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 ZCCM Investments will offset losses from the drop in ZCCM Investments' long position.

The idea behind Bilendi and ZCCM Investments Holdings 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.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.