Correlation Between ZIM Integrated and Marathon Digital

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

Diversification Opportunities for ZIM Integrated and Marathon Digital

0.02

Correlation Coefficient

ZIM Integrated  Marathon Digital

Significant diversification

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

Pair Corralation between ZIM Integrated and Marathon Digital

Considering the 90-day investment horizon ZIM Integrated Shipping is expected to generate 0.83 times more return on investment than Marathon Digital. However, ZIM Integrated Shipping is 1.21 times less risky than Marathon Digital. It trades about 0.19 of its potential returns per unit of risk. Marathon Digital Holdings is currently generating about -0.15 per unit of risk. If you would invest  957.00  in ZIM Integrated Shipping on January 24, 2024 and sell it today you would earn a total of  149.00  from holding ZIM Integrated Shipping or generate 15.57% 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.  Marathon Digital Holdings

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 conflicting performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Marathon Digital Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marathon Digital Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Marathon Digital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ZIM Integrated and Marathon Digital

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

The idea behind ZIM Integrated Shipping and Marathon Digital Holdings 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.