Correlation Between ZIM Integrated and Golden Ocean
Can any of the company-specific risk be diversified away by investing in both ZIM Integrated and Golden Ocean 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 Golden Ocean 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 Golden Ocean Group, you can compare the effects of market volatilities on ZIM Integrated and Golden Ocean 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 Golden Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZIM Integrated and Golden Ocean.
Diversification Opportunities for ZIM Integrated and Golden Ocean
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ZIM and Golden is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ZIM Integrated Shipping and Golden Ocean Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Ocean Group 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 Golden Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Ocean Group has no effect on the direction of ZIM Integrated i.e., ZIM Integrated and Golden Ocean go up and down completely randomly.
Pair Corralation between ZIM Integrated and Golden Ocean
Considering the 90-day investment horizon ZIM Integrated Shipping is expected to generate 1.66 times more return on investment than Golden Ocean. However, ZIM Integrated is 1.66 times more volatile than Golden Ocean Group. It trades about -0.01 of its potential returns per unit of risk. Golden Ocean Group is currently generating about -0.07 per unit of risk. If you would invest 2,274 in ZIM Integrated Shipping on August 29, 2024 and sell it today you would lose (64.00) from holding ZIM Integrated Shipping or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZIM Integrated Shipping vs. Golden Ocean Group
Performance |
| Timeline |
| ZIM Integrated Shipping |
| Golden Ocean Group |
ZIM Integrated and Golden Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZIM Integrated and Golden Ocean
The main advantage of trading using opposite ZIM Integrated and Golden Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZIM Integrated position performs unexpectedly, Golden Ocean 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 Golden Ocean will offset losses from the drop in Golden Ocean's long position.| ZIM Integrated vs. Golden Ocean Group | ZIM Integrated vs. Genco Shipping Trading | ZIM Integrated vs. Global Ship Lease | ZIM Integrated vs. Diana Shipping |
| Golden Ocean vs. Genco Shipping Trading | Golden Ocean vs. Global Ship Lease | Golden Ocean vs. Diana Shipping | Golden Ocean vs. Star Bulk Carriers |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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