Correlation Between Delta Air and ZIM Integrated

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

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

Diversification Opportunities for Delta Air and ZIM Integrated

-0.21

Correlation Coefficient

Delta Air  ZIM Integrated

Very good diversification

The 3 months correlation between Delta and ZIM is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Delta Air Lines 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 Delta Air 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 Delta Air Lines 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 Delta Air i.e., Delta Air and ZIM Integrated go up and down completely randomly.

Pair Corralation between Delta Air and ZIM Integrated

Assuming the 90 days horizon Delta Air Lines is expected to under-perform the ZIM Integrated. But the stock apears to be less risky and, when comparing its historical volatility, Delta Air Lines is 1.61 times less risky than ZIM Integrated. The stock trades about -0.16 of its potential returns per unit of risk. The ZIM Integrated Shipping is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,764  in ZIM Integrated Shipping on December 20, 2024 and sell it today you would lose (19.00) from holding ZIM Integrated Shipping or give up 1.08% of portfolio value over 90 days.

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

Delta Air Lines  vs.  ZIM Integrated Shipping

Delta Air Lines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Delta Air Lines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ZIM Integrated Shipping

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ZIM Integrated Shipping are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ZIM Integrated is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Delta Air and ZIM Integrated

The main advantage of trading using opposite Delta Air and ZIM Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Air 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 Delta Air Lines 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..