Correlation Between Zurich Insurance and Kinnevik Investment
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Kinnevik Investment 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 Kinnevik Investment 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 Kinnevik Investment AB, you can compare the effects of market volatilities on Zurich Insurance and Kinnevik Investment 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 Kinnevik Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Kinnevik Investment.
Diversification Opportunities for Zurich Insurance and Kinnevik Investment
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and Kinnevik is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Kinnevik Investment AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinnevik Investment 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 Kinnevik Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinnevik Investment has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Kinnevik Investment go up and down completely randomly.
Pair Corralation between Zurich Insurance and Kinnevik Investment
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.42 times more return on investment than Kinnevik Investment. However, Zurich Insurance Group is 2.37 times less risky than Kinnevik Investment. It trades about 0.33 of its potential returns per unit of risk. Kinnevik Investment AB is currently generating about -0.04 per unit of risk. If you would invest 52,036 in Zurich Insurance Group on August 28, 2024 and sell it today you would earn a total of 3,164 from holding Zurich Insurance Group or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zurich Insurance Group vs. Kinnevik Investment AB
Performance |
| Timeline |
| Zurich Insurance |
| Kinnevik Investment |
Zurich Insurance and Kinnevik Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Kinnevik Investment
The main advantage of trading using opposite Zurich Insurance and Kinnevik Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Kinnevik Investment 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 Kinnevik Investment will offset losses from the drop in Kinnevik Investment's long position.| Zurich Insurance vs. Cizzle Biotechnology Holdings | Zurich Insurance vs. X FAB Silicon Foundries | Zurich Insurance vs. Allianz Technology Trust | Zurich Insurance vs. Alfa Financial Software |
| Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Samsung Electronics Co | Kinnevik Investment vs. Hyundai Motor | Kinnevik Investment vs. Toyota Motor Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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