Correlation Between ZCCM Investments and Lexibook Linguistic

Can any of the company-specific risk be diversified away by investing in both ZCCM Investments and Lexibook Linguistic 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 Lexibook Linguistic 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 Lexibook Linguistic Electronic, you can compare the effects of market volatilities on ZCCM Investments and Lexibook Linguistic 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 Lexibook Linguistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZCCM Investments and Lexibook Linguistic.

Diversification Opportunities for ZCCM Investments and Lexibook Linguistic

0.01

Correlation Coefficient

ZCCM Investments  Lexibook Linguistic

Significant diversification

The 3 months correlation between ZCCM and Lexibook is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ZCCM Investments Holdings and Lexibook Linguistic Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexibook Linguistic 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 Lexibook Linguistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexibook Linguistic has no effect on the direction of ZCCM Investments i.e., ZCCM Investments and Lexibook Linguistic go up and down completely randomly.

Pair Corralation between ZCCM Investments and Lexibook Linguistic

Assuming the 90 days trading horizon ZCCM Investments Holdings is expected to generate 10.91 times more return on investment than Lexibook Linguistic. However, ZCCM Investments is 10.91 times more volatile than Lexibook Linguistic Electronic. It trades about 0.18 of its potential returns per unit of risk. Lexibook Linguistic Electronic is currently generating about 0.09 per unit of risk. If you would invest  126.00  in ZCCM Investments Holdings on August 29, 2024 and sell it today you would earn a total of  13.00  from holding ZCCM Investments Holdings or generate 10.32% return on investment over 90 days.

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

ZCCM Investments Holdings  vs.  Lexibook Linguistic Electronic

ZCCM Investments Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ZCCM Investments Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Lexibook Linguistic

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lexibook Linguistic Electronic are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Lexibook Linguistic is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ZCCM Investments and Lexibook Linguistic

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

The idea behind ZCCM Investments Holdings and Lexibook Linguistic Electronic 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.