Correlation Between Zacapa Resources and TD Holdings

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

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

Diversification Opportunities for Zacapa Resources and TD Holdings

0.81

Correlation Coefficient

Zacapa Resources  TD Holdings

Very poor diversification

The 3 months correlation between Zacapa and GLG is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Zacapa Resources and TD Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Holdings and Zacapa Resources 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 Zacapa Resources are associated (or correlated) with TD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Holdings has no effect on the direction of Zacapa Resources i.e., Zacapa Resources and TD Holdings go up and down completely randomly.

Pair Corralation between Zacapa Resources and TD Holdings

If you would invest  51.00  in TD Holdings on September 23, 2024 and sell it today you would earn a total of  0.00  from holding TD Holdings or generate 0.0% return on investment over 90 days.

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

Zacapa Resources  vs.  TD Holdings

Zacapa Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zacapa Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Zacapa Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

TD Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Zacapa Resources and TD Holdings

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

The idea behind Zacapa Resources and TD Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.