Correlation Between PPJ Healthcare and ZIM Integrated

Can any of the company-specific risk be diversified away by investing in both PPJ Healthcare and ZIM Integrated 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 PPJ Healthcare and ZIM Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PPJ Healthcare Enterprises and ZIM Integrated Shipping, you can compare the effects of market volatilities on PPJ Healthcare and ZIM Integrated 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 PPJ Healthcare with a short position of ZIM Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPJ Healthcare and ZIM Integrated.

Diversification Opportunities for PPJ Healthcare and ZIM Integrated

0.26

Correlation Coefficient

PPJ Healthcare  ZIM Integrated

Modest diversification

The 3 months correlation between PPJ and ZIM is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding PPJ Healthcare Enterprises and ZIM Integrated Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIM Integrated Shipping and PPJ Healthcare 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 PPJ Healthcare Enterprises are associated (or correlated) with ZIM Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIM Integrated Shipping has no effect on the direction of PPJ Healthcare i.e., PPJ Healthcare and ZIM Integrated go up and down completely randomly.

Pair Corralation between PPJ Healthcare and ZIM Integrated

Given the investment horizon of 90 days PPJ Healthcare is expected to generate 1.16 times less return on investment than ZIM Integrated. In addition to that, PPJ Healthcare is 3.35 times more volatile than ZIM Integrated Shipping. It trades about 0.06 of its total potential returns per unit of risk. ZIM Integrated Shipping is currently generating about 0.23 per unit of volatility. If you would invest  957.00  in ZIM Integrated Shipping on January 25, 2024 and sell it today you would earn a total of  195.00  from holding ZIM Integrated Shipping or generate 20.38% return on investment over 90 days.

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

PPJ Healthcare Enterprises  vs.  ZIM Integrated Shipping

PPJ Healthcare Enter

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PPJ Healthcare Enterprises are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal forward-looking indicators, PPJ Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

ZIM Integrated Shipping

Risk-Adjusted Performance

0 of 100

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 unsteady 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.

Pair Trading with PPJ Healthcare and ZIM Integrated

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

The idea behind PPJ Healthcare Enterprises and ZIM Integrated Shipping 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.