Correlation Between ZIM Integrated and Global Ship

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

Diversification Opportunities for ZIM Integrated and Global Ship

0.18

Correlation Coefficient

ZIM Integrated  Global Ship

Average diversification

The 3 months correlation between ZIM and Global is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and Global Ship go up and down completely randomly.

Pair Corralation between ZIM Integrated and Global Ship

Considering the 90-day investment horizon ZIM Integrated Shipping is expected to generate 3.3 times more return on investment than Global Ship. However, ZIM Integrated is 3.3 times more volatile than Global Ship Lease. It trades about 0.11 of its potential returns per unit of risk. Global Ship Lease is currently generating about 0.33 per unit of risk. If you would invest  1,095  in ZIM Integrated Shipping on February 1, 2024 and sell it today you would earn a total of  212.00  from holding ZIM Integrated Shipping or generate 19.36% return on investment over 90 days.

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

ZIM Integrated Shipping  vs.  Global Ship Lease

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.

Global Ship Lease

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Global Ship may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with ZIM Integrated and Global Ship

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

The idea behind ZIM Integrated Shipping and Global Ship Lease 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.