Correlation Between ZIM Integrated and Adecco

Can any of the company-specific risk be diversified away by investing in both ZIM Integrated and Adecco 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 Adecco 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 Adecco Group, you can compare the effects of market volatilities on ZIM Integrated and Adecco 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 Adecco. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZIM Integrated and Adecco.

Diversification Opportunities for ZIM Integrated and Adecco

0.04

Correlation Coefficient

ZIM Integrated  Adecco

Significant diversification

The 3 months correlation between ZIM and Adecco is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and Adecco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group 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 Adecco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecco Group has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and Adecco go up and down completely randomly.

Pair Corralation between ZIM Integrated and Adecco

Considering the 90-day investment horizon ZIM Integrated Shipping is expected to under-perform the Adecco. In addition to that, ZIM Integrated is 1.26 times more volatile than Adecco Group. It trades about -0.05 of its total potential returns per unit of risk. Adecco Group is currently generating about 0.14 per unit of volatility. If you would invest  1,224  in Adecco Group on December 27, 2024 and sell it today you would earn a total of  303.00  from holding Adecco Group or generate 24.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

ZIM Integrated Shipping  vs.  Adecco Group

ZIM Integrated Shipping

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZIM Integrated Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Adecco Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adecco Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Adecco showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZIM Integrated and Adecco

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

The idea behind ZIM Integrated Shipping and Adecco Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.