Correlation Between Zurich Insurance and Aberdeen Diversified
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Aberdeen Diversified 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 Aberdeen Diversified 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 Aberdeen Diversified Income, you can compare the effects of market volatilities on Zurich Insurance and Aberdeen Diversified 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 Aberdeen Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Aberdeen Diversified.
Diversification Opportunities for Zurich Insurance and Aberdeen Diversified
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zurich and Aberdeen is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified 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 Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Aberdeen Diversified go up and down completely randomly.
Pair Corralation between Zurich Insurance and Aberdeen Diversified
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.54 times more return on investment than Aberdeen Diversified. However, Zurich Insurance Group is 1.84 times less risky than Aberdeen Diversified. It trades about 0.1 of its potential returns per unit of risk. Aberdeen Diversified Income is currently generating about 0.02 per unit of risk. If you would invest 41,795 in Zurich Insurance Group on August 29, 2024 and sell it today you would earn a total of 13,355 from holding Zurich Insurance Group or generate 31.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.68% |
| Values | Daily Returns |
Zurich Insurance Group vs. Aberdeen Diversified Income
Performance |
| Timeline |
| Zurich Insurance |
| Aberdeen Diversified |
Zurich Insurance and Aberdeen Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Aberdeen Diversified
The main advantage of trading using opposite Zurich Insurance and Aberdeen Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Aberdeen Diversified 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 Aberdeen Diversified will offset losses from the drop in Aberdeen Diversified's long position.| Zurich Insurance vs. Neometals | Zurich Insurance vs. Coor Service Management | Zurich Insurance vs. Fidelity Sustainable USD | Zurich Insurance vs. Sancus Lending 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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