Correlation Between Chesapeake Granite and ZIM Integrated

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

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

Diversification Opportunities for Chesapeake Granite and ZIM Integrated

0.35

Correlation Coefficient

Chesapeake Granite  ZIM Integrated

Weak diversification

The 3 months correlation between Chesapeake and ZIM is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Granite Wash 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 Chesapeake Granite 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 Chesapeake Granite Wash 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 Chesapeake Granite i.e., Chesapeake Granite and ZIM Integrated go up and down completely randomly.

Pair Corralation between Chesapeake Granite and ZIM Integrated

If you would invest  1,851  in ZIM Integrated Shipping on October 5, 2024 and sell it today you would earn a total of  218.00  from holding ZIM Integrated Shipping or generate 11.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.88%
Values	Daily Returns

Chesapeake Granite Wash  vs.  ZIM Integrated Shipping

Chesapeake Granite Wash

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chesapeake Granite Wash has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Chesapeake Granite is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

ZIM Integrated Shipping

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days ZIM Integrated Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Chesapeake Granite and ZIM Integrated

The main advantage of trading using opposite Chesapeake Granite and ZIM Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Granite 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 Chesapeake Granite Wash 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.