Correlation Between ECONET WIRELESS and ZB FINANCIAL
Can any of the company-specific risk be diversified away by investing in both ECONET WIRELESS and ZB FINANCIAL 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 ECONET WIRELESS and ZB FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECONET WIRELESS HOLDINGS and ZB FINANCIAL HOLDINGS, you can compare the effects of market volatilities on ECONET WIRELESS and ZB FINANCIAL 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 ECONET WIRELESS with a short position of ZB FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECONET WIRELESS and ZB FINANCIAL.
Diversification Opportunities for ECONET WIRELESS and ZB FINANCIAL
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ECONET and ZBFH is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ECONET WIRELESS HOLDINGS and ZB FINANCIAL HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZB FINANCIAL HOLDINGS and ECONET WIRELESS 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 ECONET WIRELESS HOLDINGS are associated (or correlated) with ZB FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZB FINANCIAL HOLDINGS has no effect on the direction of ECONET WIRELESS i.e., ECONET WIRELESS and ZB FINANCIAL go up and down completely randomly.
Pair Corralation between ECONET WIRELESS and ZB FINANCIAL
Assuming the 90 days trading horizon ECONET WIRELESS HOLDINGS is expected to generate 0.74 times more return on investment than ZB FINANCIAL. However, ECONET WIRELESS HOLDINGS is 1.35 times less risky than ZB FINANCIAL. It trades about 0.08 of its potential returns per unit of risk. ZB FINANCIAL HOLDINGS is currently generating about -0.1 per unit of risk. If you would invest 34,095 in ECONET WIRELESS HOLDINGS on December 21, 2024 and sell it today you would earn a total of 5,823 from holding ECONET WIRELESS HOLDINGS or generate 17.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ECONET WIRELESS HOLDINGS vs. ZB FINANCIAL HOLDINGS
Performance |
Timeline |
ECONET WIRELESS HOLDINGS |
ZB FINANCIAL HOLDINGS |
ECONET WIRELESS and ZB FINANCIAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ECONET WIRELESS and ZB FINANCIAL
The main advantage of trading using opposite ECONET WIRELESS and ZB FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECONET WIRELESS position performs unexpectedly, ZB FINANCIAL 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 ZB FINANCIAL will offset losses from the drop in ZB FINANCIAL's long position.ECONET WIRELESS vs. STAR AFRICA PORATION | ECONET WIRELESS vs. CAFCA LIMITED | ECONET WIRELESS vs. FIRST MUTUAL PROPERTIES | ECONET WIRELESS vs. AFRICAN DISTILLERS LIMITED |
ZB FINANCIAL vs. Cass Saddle Agriculture | ZB FINANCIAL vs. AFRICAN DISTILLERS LIMITED | ZB FINANCIAL vs. ECONET WIRELESS HOLDINGS |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |