Correlation Between ZIM Integrated and COSCO SHIPPING

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

Diversification Opportunities for ZIM Integrated and COSCO SHIPPING

0.14

Correlation Coefficient

ZIM Integrated  COSCO SHIPPING

Average diversification

The 3 months correlation between ZIM and COSCO is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and COSCO SHIPPING Ports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Ports 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Ports has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and COSCO SHIPPING go up and down completely randomly.

Pair Corralation between ZIM Integrated and COSCO SHIPPING

Considering the 90-day investment horizon ZIM Integrated Shipping is expected to under-perform the COSCO SHIPPING. In addition to that, ZIM Integrated is 6.32 times more volatile than COSCO SHIPPING Ports. It trades about -0.22 of its total potential returns per unit of risk. COSCO SHIPPING Ports is currently generating about 0.12 per unit of volatility. If you would invest  55.00  in COSCO SHIPPING Ports on September 21, 2024 and sell it today you would earn a total of  1.00  from holding COSCO SHIPPING Ports or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

ZIM Integrated Shipping  vs.  COSCO SHIPPING Ports

ZIM Integrated Shipping

Risk-Adjusted Performance

1 of 100

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. In spite of very healthy forward indicators, ZIM Integrated is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

COSCO SHIPPING Ports

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING Ports are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, COSCO SHIPPING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ZIM Integrated and COSCO SHIPPING

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

The idea behind ZIM Integrated Shipping and COSCO SHIPPING Ports 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.