Correlation Between ALTAIR RES and ZIM Integrated

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

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

Diversification Opportunities for ALTAIR RES and ZIM Integrated

0.0

Correlation Coefficient

ALTAIR RES  ZIM Integrated

Pay attention - limited upside

The 3 months correlation between ALTAIR and ZIM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ALTAIR RES INC and ZIM Integrated Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIM Integrated Shipping and ALTAIR RES 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 ALTAIR RES INC are associated (or correlated) with ZIM Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIM Integrated Shipping has no effect on the direction of ALTAIR RES i.e., ALTAIR RES and ZIM Integrated go up and down completely randomly.

Pair Corralation between ALTAIR RES and ZIM Integrated

Assuming the 90 days trading horizon ALTAIR RES INC is expected to generate 11.21 times more return on investment than ZIM Integrated. However, ALTAIR RES is 11.21 times more volatile than ZIM Integrated Shipping. It trades about 0.08 of its potential returns per unit of risk. ZIM Integrated Shipping is currently generating about 0.06 per unit of risk. If you would invest  0.40  in ALTAIR RES INC on October 4, 2024 and sell it today you would lose (0.35) from holding ALTAIR RES INC or give up 87.5% of portfolio value over 90 days.

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

ALTAIR RES INC  vs.  ZIM Integrated Shipping

ALTAIR RES INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

ZIM Integrated Shipping

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZIM Integrated Shipping are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ZIM Integrated reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALTAIR RES and ZIM Integrated

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

The idea behind ALTAIR RES INC and ZIM Integrated Shipping 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.