Correlation Between Zimplats Holdings and Belysse Group

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

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

Diversification Opportunities for Zimplats Holdings and Belysse Group

0.04

Correlation Coefficient

Zimplats Holdings  Belysse Group

Significant diversification

The 3 months correlation between Zimplats and Belysse is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Zimplats Holdings Limited and Belysse Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belysse Group NV and Zimplats Holdings 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 Zimplats Holdings Limited are associated (or correlated) with Belysse Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belysse Group NV has no effect on the direction of Zimplats Holdings i.e., Zimplats Holdings and Belysse Group go up and down completely randomly.

Pair Corralation between Zimplats Holdings and Belysse Group

Assuming the 90 days horizon Zimplats Holdings Limited is expected to generate 0.89 times more return on investment than Belysse Group. However, Zimplats Holdings Limited is 1.13 times less risky than Belysse Group. It trades about -0.09 of its potential returns per unit of risk. Belysse Group NV is currently generating about -0.24 per unit of risk. If you would invest  759.00  in Zimplats Holdings Limited on December 4, 2024 and sell it today you would lose (31.00) from holding Zimplats Holdings Limited or give up 4.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Zimplats Holdings Limited  vs.  Belysse Group NV

Zimplats Holdings

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Belysse Group NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Belysse Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Zimplats Holdings and Belysse Group

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

The idea behind Zimplats Holdings Limited and Belysse Group NV 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..