Correlation Between COSCO SHIPPING and ZIM Integrated
Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING 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 COSCO SHIPPING and ZIM Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSCO SHIPPING Ports and ZIM Integrated Shipping, you can compare the effects of market volatilities on COSCO SHIPPING 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 COSCO SHIPPING with a short position of ZIM Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and ZIM Integrated.
Diversification Opportunities for COSCO SHIPPING and ZIM Integrated
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COSCO and ZIM is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Ports 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 COSCO SHIPPING 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 COSCO SHIPPING Ports 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 COSCO SHIPPING i.e., COSCO SHIPPING and ZIM Integrated go up and down completely randomly.
Pair Corralation between COSCO SHIPPING and ZIM Integrated
Assuming the 90 days horizon COSCO SHIPPING Ports is expected to generate 0.52 times more return on investment than ZIM Integrated. However, COSCO SHIPPING Ports is 1.92 times less risky than ZIM Integrated. It trades about -0.11 of its potential returns per unit of risk. ZIM Integrated Shipping is currently generating about -0.1 per unit of risk. If you would invest 59.00 in COSCO SHIPPING Ports on September 2, 2024 and sell it today you would lose (3.00) from holding COSCO SHIPPING Ports or give up 5.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
COSCO SHIPPING Ports vs. ZIM Integrated Shipping
Performance |
| Timeline |
| COSCO SHIPPING Ports |
| ZIM Integrated Shipping |
COSCO SHIPPING and ZIM Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSCO SHIPPING and ZIM Integrated
The main advantage of trading using opposite COSCO SHIPPING and ZIM Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING 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.| COSCO SHIPPING vs. China Merchants Port | COSCO SHIPPING vs. Diana Shipping | COSCO SHIPPING vs. ZIM Integrated Shipping |
| ZIM Integrated vs. Golden Ocean Group | ZIM Integrated vs. Genco Shipping Trading | ZIM Integrated vs. Global Ship Lease | ZIM Integrated vs. Diana Shipping |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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