Correlation Between SFL and ZIM Integrated

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Can any of the company-specific risk be diversified away by investing in both SFL 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 SFL and ZIM Integrated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and ZIM Integrated Shipping, you can compare the effects of market volatilities on SFL 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 SFL with a short position of ZIM Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and ZIM Integrated.

Diversification Opportunities for SFL and ZIM Integrated

SFLZIMDiversified AwaySFLZIMDiversified Away100%
-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between SFL and ZIM is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. 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 SFL 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 SFL Corporation 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 SFL i.e., SFL and ZIM Integrated go up and down completely randomly.

Pair Corralation between SFL and ZIM Integrated

Considering the 90-day investment horizon SFL Corporation is expected to under-perform the ZIM Integrated. But the stock apears to be less risky and, when comparing its historical volatility, SFL Corporation is 2.69 times less risky than ZIM Integrated. The stock trades about -0.05 of its potential returns per unit of risk. The ZIM Integrated Shipping is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  768.00  in ZIM Integrated Shipping on November 21, 2024 and sell it today you would earn a total of  1,245  from holding ZIM Integrated Shipping or generate 162.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SFL Corp.  vs.  ZIM Integrated Shipping

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50510
JavaScript chart by amCharts 3.21.15SFL ZIM
       Timeline  
SFL Corporation 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SFL Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9.51010.511
ZIM Integrated Shipping 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1618202224

SFL and ZIM Integrated Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.94-2.2-1.46-0.73-0.01180.671.382.082.793.5 0.040.060.080.100.12
JavaScript chart by amCharts 3.21.15SFL ZIM
       Returns  

Pair Trading with SFL and ZIM Integrated

The main advantage of trading using opposite SFL and ZIM Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL 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.
The idea behind SFL Corporation and ZIM Integrated Shipping 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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