Correlation Between Zurich Insurance and Ceres Power
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Ceres Power 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 Ceres Power 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 Ceres Power Holdings, you can compare the effects of market volatilities on Zurich Insurance and Ceres Power 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 Ceres Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Ceres Power.
Diversification Opportunities for Zurich Insurance and Ceres Power
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and Ceres is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Ceres Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Power Holdings 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 Ceres Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Power Holdings has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Ceres Power go up and down completely randomly.
Pair Corralation between Zurich Insurance and Ceres Power
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.33 times more return on investment than Ceres Power. However, Zurich Insurance Group is 2.99 times less risky than Ceres Power. It trades about -0.01 of its potential returns per unit of risk. Ceres Power Holdings is currently generating about -0.18 per unit of risk. If you would invest 53,310 in Zurich Insurance Group on October 25, 2024 and sell it today you would lose (100.00) from holding Zurich Insurance Group or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Ceres Power Holdings
Performance |
| Timeline |
| Zurich Insurance |
| Ceres Power Holdings |
Zurich Insurance and Ceres Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Ceres Power
The main advantage of trading using opposite Zurich Insurance and Ceres Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Ceres Power 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 Ceres Power will offset losses from the drop in Ceres Power's long position.| Zurich Insurance vs. Xeros Technology Group | Zurich Insurance vs. LPKF Laser Electronics | Zurich Insurance vs. Take Two Interactive Software | Zurich Insurance vs. Creo Medical Group |
| Ceres Power vs. Broadridge Financial Solutions | Ceres Power vs. Broadcom | Ceres Power vs. EVS Broadcast Equipment | Ceres Power vs. Mobius Investment Trust |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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