Correlation Between Triple Flag and Zimplats Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Triple Flag and Zimplats Holdings 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 Triple Flag and Zimplats Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and Zimplats Holdings Limited, you can compare the effects of market volatilities on Triple Flag and Zimplats Holdings 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 Triple Flag with a short position of Zimplats Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and Zimplats Holdings.

Diversification Opportunities for Triple Flag and Zimplats Holdings

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Triple and Zimplats is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious and Zimplats Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zimplats Holdings and Triple Flag 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 Triple Flag Precious are associated (or correlated) with Zimplats Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zimplats Holdings has no effect on the direction of Triple Flag i.e., Triple Flag and Zimplats Holdings go up and down completely randomly.

Pair Corralation between Triple Flag and Zimplats Holdings

Given the investment horizon of 90 days Triple Flag Precious is expected to under-perform the Zimplats Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Triple Flag Precious is 1.78 times less risky than Zimplats Holdings. The stock trades about -0.1 of its potential returns per unit of risk. The Zimplats Holdings Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  956.00  in Zimplats Holdings Limited on September 26, 2024 and sell it today you would lose (44.00) from holding Zimplats Holdings Limited or give up 4.6% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Triple Flag Precious  vs.  Zimplats Holdings Limited

 Performance 
       Timeline  
Triple Flag Precious 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Triple Flag Precious has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
Zimplats Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Zimplats Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Zimplats Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Triple Flag and Zimplats Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Triple Flag and Zimplats Holdings

The main advantage of trading using opposite Triple Flag and Zimplats Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag position performs unexpectedly, Zimplats Holdings 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 Zimplats Holdings will offset losses from the drop in Zimplats Holdings' long position.
The idea behind Triple Flag Precious and Zimplats Holdings Limited 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Money Managers
Screen money managers from public funds and ETFs managed around the world
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum