Correlation Between Zurich Insurance and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Vienna Insurance 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 Vienna Insurance 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 Vienna Insurance Group, you can compare the effects of market volatilities on Zurich Insurance and Vienna Insurance 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 Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Vienna Insurance.
Diversification Opportunities for Zurich Insurance and Vienna Insurance
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zurich and Vienna is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance 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 Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Vienna Insurance go up and down completely randomly.
Pair Corralation between Zurich Insurance and Vienna Insurance
Assuming the 90 days trading horizon Zurich Insurance is expected to generate 1.56 times less return on investment than Vienna Insurance. But when comparing it to its historical volatility, Zurich Insurance Group is 1.05 times less risky than Vienna Insurance. It trades about 0.06 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,314 in Vienna Insurance Group on November 28, 2024 and sell it today you would earn a total of 1,126 from holding Vienna Insurance Group or generate 48.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.37% |
| Values | Daily Returns |
Zurich Insurance Group vs. Vienna Insurance Group
Performance |
| Timeline |
| Zurich Insurance |
| Vienna Insurance |
Zurich Insurance and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Vienna Insurance
The main advantage of trading using opposite Zurich Insurance and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Vienna Insurance 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 Vienna Insurance will offset losses from the drop in Vienna Insurance's long position.| Zurich Insurance vs. International Biotechnology Trust | Zurich Insurance vs. Travel Leisure Co | Zurich Insurance vs. Take Two Interactive Software | Zurich Insurance vs. Roper Technologies |
| Vienna Insurance vs. Roebuck Food Group | Vienna Insurance vs. CVS Health Corp | Vienna Insurance vs. Austevoll Seafood ASA | Vienna Insurance vs. HCA Healthcare |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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