Correlation Between Zurich Insurance and Exelon Corp
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Exelon Corp 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 Exelon Corp 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 Exelon Corp, you can compare the effects of market volatilities on Zurich Insurance and Exelon Corp 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 Exelon Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Exelon Corp.
Diversification Opportunities for Zurich Insurance and Exelon Corp
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and Exelon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Exelon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exelon Corp 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 Exelon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exelon Corp has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Exelon Corp go up and down completely randomly.
Pair Corralation between Zurich Insurance and Exelon Corp
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.7 times more return on investment than Exelon Corp. However, Zurich Insurance Group is 1.44 times less risky than Exelon Corp. It trades about 0.2 of its potential returns per unit of risk. Exelon Corp is currently generating about -0.07 per unit of risk. If you would invest 50,285 in Zurich Insurance Group on September 12, 2024 and sell it today you would earn a total of 4,975 from holding Zurich Insurance Group or generate 9.89% 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. Exelon Corp
Performance |
| Timeline |
| Zurich Insurance |
| Exelon Corp |
Zurich Insurance and Exelon Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Exelon Corp
The main advantage of trading using opposite Zurich Insurance and Exelon Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Exelon Corp 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 Exelon Corp will offset losses from the drop in Exelon Corp's long position.| Zurich Insurance vs. Neometals | Zurich Insurance vs. Coor Service Management | Zurich Insurance vs. Fidelity Sustainable USD | Zurich Insurance vs. Surgical Science Sweden |
| Exelon Corp vs. iShares Physical Silver | Exelon Corp vs. Griffin Mining | Exelon Corp vs. AfriTin Mining | Exelon Corp vs. Team Internet Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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