Correlation Between OK ZIMBABWE and Revitus Property

Can any of the company-specific risk be diversified away by investing in both OK ZIMBABWE and Revitus Property 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 Revitus Property 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 Revitus Property Opportunities, you can compare the effects of market volatilities on OK ZIMBABWE and Revitus Property 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 Revitus Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of OK ZIMBABWE and Revitus Property.

Diversification Opportunities for OK ZIMBABWE and Revitus Property

0.32

Correlation Coefficient

OK ZIMBABWE  Revitus Property

Weak diversification

The 3 months correlation between OKZ and Revitus is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding OK ZIMBABWE LIMITED and Revitus Property Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revitus Property Opp 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 Revitus Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revitus Property Opp has no effect on the direction of OK ZIMBABWE i.e., OK ZIMBABWE and Revitus Property go up and down completely randomly.

Pair Corralation between OK ZIMBABWE and Revitus Property

Assuming the 90 days trading horizon OK ZIMBABWE is expected to generate 1.06 times less return on investment than Revitus Property. But when comparing it to its historical volatility, OK ZIMBABWE LIMITED is 1.0 times less risky than Revitus Property. It trades about 0.05 of its potential returns per unit of risk. Revitus Property Opportunities is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,000,000  in Revitus Property Opportunities on September 28, 2024 and sell it today you would lose (3,990,680) from holding Revitus Property Opportunities or give up 99.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	66.84%
Values	Daily Returns

OK ZIMBABWE LIMITED  vs.  Revitus Property Opportunities

OK ZIMBABWE LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OK ZIMBABWE LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Revitus Property Opp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Revitus Property Opportunities are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Revitus Property demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OK ZIMBABWE and Revitus Property

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

The idea behind OK ZIMBABWE LIMITED and Revitus Property Opportunities 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.