Correlation Between ZIM Integrated and Castor Maritime

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

Diversification Opportunities for ZIM Integrated and Castor Maritime

0.02

Correlation Coefficient

ZIM Integrated  Castor Maritime

Significant diversification

The 3 months correlation between ZIM and Castor is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and Castor Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castor Maritime 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 Castor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castor Maritime has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and Castor Maritime go up and down completely randomly.

Pair Corralation between ZIM Integrated and Castor Maritime

Considering the 90-day investment horizon ZIM Integrated Shipping is expected to under-perform the Castor Maritime. In addition to that, ZIM Integrated is 1.41 times more volatile than Castor Maritime. It trades about -0.05 of its total potential returns per unit of risk. Castor Maritime is currently generating about -0.07 per unit of volatility. If you would invest  288.00  in Castor Maritime on December 27, 2024 and sell it today you would lose (35.00) from holding Castor Maritime or give up 12.15% of portfolio value over 90 days.

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

ZIM Integrated Shipping  vs.  Castor Maritime

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.

Castor Maritime

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ZIM Integrated and Castor Maritime

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

The idea behind ZIM Integrated Shipping and Castor Maritime 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.