Correlation Between ZIM Integrated and MPC Container

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

Diversification Opportunities for ZIM Integrated and MPC Container

-0.23

Correlation Coefficient

ZIM Integrated  MPC Container

Very good diversification

The 3 months correlation between ZIM and MPC is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and MPC Container Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Container Ships 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 MPC Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Container Ships has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and MPC Container go up and down completely randomly.

Pair Corralation between ZIM Integrated and MPC Container

Considering the 90-day investment horizon ZIM Integrated is expected to generate 5.59 times less return on investment than MPC Container. But when comparing it to its historical volatility, ZIM Integrated Shipping is 3.78 times less risky than MPC Container. It trades about 0.06 of its potential returns per unit of risk. MPC Container Ships is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  82.00  in MPC Container Ships on October 10, 2024 and sell it today you would earn a total of  99.00  from holding MPC Container Ships or generate 120.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

ZIM Integrated Shipping  vs.  MPC Container Ships

ZIM Integrated Shipping

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZIM Integrated Shipping are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward indicators, ZIM Integrated displayed solid returns over the last few months and may actually be approaching a breakup point.

MPC Container Ships

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ZIM Integrated and MPC Container

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

The idea behind ZIM Integrated Shipping and MPC Container Ships 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.