Correlation Between ZIM Integrated and International Consolidated
Can any of the company-specific risk be diversified away by investing in both ZIM Integrated and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on ZIM Integrated and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZIM Integrated and International Consolidated.
Diversification Opportunities for ZIM Integrated and International Consolidated
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZIM and International is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and International Consolidated go up and down completely randomly.
Pair Corralation between ZIM Integrated and International Consolidated
Assuming the 90 days horizon ZIM Integrated Shipping is expected to under-perform the International Consolidated. In addition to that, ZIM Integrated is 2.78 times more volatile than International Consolidated Airlines. It trades about -0.06 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.49 per unit of volatility. If you would invest 282.00 in International Consolidated Airlines on September 13, 2024 and sell it today you would earn a total of 60.00 from holding International Consolidated Airlines or generate 21.28% 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. International Consolidated Air
Performance |
| Timeline |
| ZIM Integrated Shipping |
| International Consolidated |
ZIM Integrated and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZIM Integrated and International Consolidated
The main advantage of trading using opposite ZIM Integrated and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZIM Integrated position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| ZIM Integrated vs. United Internet AG | ZIM Integrated vs. Laureate Education | ZIM Integrated vs. Xinhua Winshare Publishing | ZIM Integrated vs. G8 EDUCATION |
Check out your portfolio center.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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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