Correlation Between Zurich Insurance and Industrivarden
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Industrivarden 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 Zurich Insurance and Industrivarden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zurich Insurance Group and Industrivarden AB ser, you can compare the effects of market volatilities on Zurich Insurance and Industrivarden 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 Zurich Insurance with a short position of Industrivarden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Industrivarden.
Diversification Opportunities for Zurich Insurance and Industrivarden
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zurich and Industrivarden is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser and Zurich Insurance 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 Zurich Insurance Group are associated (or correlated) with Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Industrivarden go up and down completely randomly.
Pair Corralation between Zurich Insurance and Industrivarden
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.82 times more return on investment than Industrivarden. However, Zurich Insurance Group is 1.22 times less risky than Industrivarden. It trades about 0.15 of its potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.0 per unit of risk. If you would invest 47,270 in Zurich Insurance Group on September 3, 2024 and sell it today you would earn a total of 8,400 from holding Zurich Insurance Group or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Industrivarden AB ser
Performance |
| Timeline |
| Zurich Insurance |
| Industrivarden AB ser |
Zurich Insurance and Industrivarden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Industrivarden
The main advantage of trading using opposite Zurich Insurance and Industrivarden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Industrivarden 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 Industrivarden will offset losses from the drop in Industrivarden's long position.| Zurich Insurance vs. CNH Industrial NV | Zurich Insurance vs. Silvercorp Metals | Zurich Insurance vs. GoldMining | Zurich Insurance vs. CAP LEASE AVIATION |
| Industrivarden vs. Lowland Investment Co | Industrivarden vs. New Residential Investment | Industrivarden vs. Advanced Medical Solutions | Industrivarden vs. Ross Stores |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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