Correlation Between ZCCM Investments and Mauna Kea

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

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

Diversification Opportunities for ZCCM Investments and Mauna Kea

0.22

Correlation Coefficient

ZCCM Investments  Mauna Kea

Modest diversification

The 3 months correlation between ZCCM and Mauna is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ZCCM Investments Holdings and Mauna Kea Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mauna Kea Technologies and ZCCM Investments 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 ZCCM Investments Holdings are associated (or correlated) with Mauna Kea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mauna Kea Technologies has no effect on the direction of ZCCM Investments i.e., ZCCM Investments and Mauna Kea go up and down completely randomly.

Pair Corralation between ZCCM Investments and Mauna Kea

Assuming the 90 days trading horizon ZCCM Investments is expected to generate 80.5 times less return on investment than Mauna Kea. In addition to that, ZCCM Investments is 1.22 times more volatile than Mauna Kea Technologies. It trades about 0.0 of its total potential returns per unit of risk. Mauna Kea Technologies is currently generating about 0.04 per unit of volatility. If you would invest  16.00  in Mauna Kea Technologies on December 30, 2024 and sell it today you would earn a total of  1.00  from holding Mauna Kea Technologies or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ZCCM Investments Holdings  vs.  Mauna Kea Technologies

ZCCM Investments Holdings

Risk-Adjusted Performance

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.

Mauna Kea Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mauna Kea Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Mauna Kea may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ZCCM Investments and Mauna Kea

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

The idea behind ZCCM Investments Holdings and Mauna Kea Technologies 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.