Correlation Between Zurich Insurance and Eaton Corp
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Eaton 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 Eaton 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 Eaton Corp PLC, you can compare the effects of market volatilities on Zurich Insurance and Eaton 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 Eaton Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Eaton Corp.
Diversification Opportunities for Zurich Insurance and Eaton Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zurich and Eaton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Eaton Corp PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Corp PLC 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 Eaton Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Corp PLC has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Eaton Corp go up and down completely randomly.
Pair Corralation between Zurich Insurance and Eaton Corp
If you would invest 41,741 in Zurich Insurance Group on September 12, 2024 and sell it today you would earn a total of 13,519 from holding Zurich Insurance Group or generate 32.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Eaton Corp PLC
Performance |
| Timeline |
| Zurich Insurance |
| Eaton Corp PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Zurich Insurance and Eaton Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Eaton Corp
The main advantage of trading using opposite Zurich Insurance and Eaton Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Eaton 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 Eaton Corp will offset losses from the drop in Eaton 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 |
| Eaton Corp vs. Coor Service Management | Eaton Corp vs. Global Net Lease | Eaton Corp vs. Premier Foods PLC | Eaton Corp vs. Liontrust Asset Management |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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