Correlation Between ZIM Integrated and Naas Technology

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

Diversification Opportunities for ZIM Integrated and Naas Technology

0.56

Correlation Coefficient

ZIM Integrated  Naas Technology

Very weak diversification

The 3 months correlation between ZIM and Naas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and Naas Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naas Technology ADR 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 Naas Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naas Technology ADR has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and Naas Technology go up and down completely randomly.

Pair Corralation between ZIM Integrated and Naas Technology

Considering the 90-day investment horizon ZIM Integrated Shipping is expected to generate 0.79 times more return on investment than Naas Technology. However, ZIM Integrated Shipping is 1.27 times less risky than Naas Technology. It trades about 0.03 of its potential returns per unit of risk. Naas Technology ADR is currently generating about -0.12 per unit of risk. If you would invest  978.00  in ZIM Integrated Shipping on January 20, 2024 and sell it today you would earn a total of  8.00  from holding ZIM Integrated Shipping or generate 0.82% return on investment over 90 days.

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

ZIM Integrated Shipping  vs.  Naas Technology ADR

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.

Naas Technology ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Naas Technology ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Naas Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ZIM Integrated and Naas Technology

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

The idea behind ZIM Integrated Shipping and Naas Technology ADR 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.