Correlation Between Wilh Wilhelmsen and ZIM Integrated

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

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

Diversification Opportunities for Wilh Wilhelmsen and ZIM Integrated

0.49

Correlation Coefficient

Wilh Wilhelmsen  ZIM Integrated

Very weak diversification

The 3 months correlation between Wilh and ZIM is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wilh Wilhelmsen Holding 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 Wilh Wilhelmsen 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 Wilh Wilhelmsen Holding 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 Wilh Wilhelmsen i.e., Wilh Wilhelmsen and ZIM Integrated go up and down completely randomly.

Pair Corralation between Wilh Wilhelmsen and ZIM Integrated

Assuming the 90 days trading horizon Wilh Wilhelmsen Holding is expected to generate 0.71 times more return on investment than ZIM Integrated. However, Wilh Wilhelmsen Holding is 1.41 times less risky than ZIM Integrated. It trades about 0.09 of its potential returns per unit of risk. ZIM Integrated Shipping is currently generating about 0.05 per unit of risk. If you would invest  791.00  in Wilh Wilhelmsen Holding on September 23, 2024 and sell it today you would earn a total of  2,369  from holding Wilh Wilhelmsen Holding or generate 299.49% return on investment over 90 days.

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

Wilh Wilhelmsen Holding  vs.  ZIM Integrated Shipping

Wilh Wilhelmsen Holding

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wilh Wilhelmsen Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Wilh Wilhelmsen reported solid returns over the last few months and may actually be approaching a breakup point.

ZIM Integrated Shipping

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZIM Integrated Shipping are ranked lower than 4 (%) 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 Wilh Wilhelmsen and ZIM Integrated

The main advantage of trading using opposite Wilh Wilhelmsen and ZIM Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilh Wilhelmsen 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 Wilh Wilhelmsen Holding 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.