Correlation Between ZIM Integrated and Okeanis Eco

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

Diversification Opportunities for ZIM Integrated and Okeanis Eco

0.12

Correlation Coefficient

ZIM Integrated  Okeanis Eco

Average diversification

The 3 months correlation between ZIM and Okeanis is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and Okeanis Eco Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okeanis Eco Tankers 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 Okeanis Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okeanis Eco Tankers has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and Okeanis Eco go up and down completely randomly.

Pair Corralation between ZIM Integrated and Okeanis Eco

Considering the 90-day investment horizon ZIM Integrated is expected to generate 2.43 times less return on investment than Okeanis Eco. In addition to that, ZIM Integrated is 1.08 times more volatile than Okeanis Eco Tankers. It trades about 0.06 of its total potential returns per unit of risk. Okeanis Eco Tankers is currently generating about 0.15 per unit of volatility. If you would invest  1,040  in Okeanis Eco Tankers on October 9, 2024 and sell it today you would earn a total of  1,215  from holding Okeanis Eco Tankers or generate 116.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	28.24%
Values	Daily Returns

ZIM Integrated Shipping  vs.  Okeanis Eco Tankers

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.

Okeanis Eco Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Okeanis Eco Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Okeanis Eco 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 Okeanis Eco

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

The idea behind ZIM Integrated Shipping and Okeanis Eco Tankers 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.