Correlation Between ZIM Integrated and Genco Shipping

Can any of the company-specific risk be diversified away by investing in both ZIM Integrated and Genco Shipping 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 ZIM Integrated and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZIM Integrated Shipping and Genco Shipping Trading, you can compare the effects of market volatilities on ZIM Integrated and Genco Shipping 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 ZIM Integrated with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZIM Integrated and Genco Shipping.

Diversification Opportunities for ZIM Integrated and Genco Shipping

0.22

Correlation Coefficient

ZIM Integrated  Genco Shipping

Modest diversification

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

Pair Corralation between ZIM Integrated and Genco Shipping

Assuming the 90 days horizon ZIM Integrated Shipping is expected to generate 2.13 times more return on investment than Genco Shipping. However, ZIM Integrated is 2.13 times more volatile than Genco Shipping Trading. It trades about 0.05 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.04 per unit of risk. If you would invest  947.00  in ZIM Integrated Shipping on October 23, 2024 and sell it today you would earn a total of  718.00  from holding ZIM Integrated Shipping or generate 75.82% return on investment over 90 days.

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

ZIM Integrated Shipping  vs.  Genco Shipping Trading

ZIM Integrated Shipping

Risk-Adjusted Performance

0 of 100

Very Weak

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

Genco Shipping Trading

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ZIM Integrated and Genco Shipping

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

The idea behind ZIM Integrated Shipping and Genco Shipping Trading 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.