Correlation Between Zurich Insurance and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Hong Kong 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 Hong Kong 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 Hong Kong Land, you can compare the effects of market volatilities on Zurich Insurance and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Hong Kong.
Diversification Opportunities for Zurich Insurance and Hong Kong
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zurich and Hong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Hong Kong Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Land 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Land has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Hong Kong go up and down completely randomly.
Pair Corralation between Zurich Insurance and Hong Kong
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 6.41 times more return on investment than Hong Kong. However, Zurich Insurance is 6.41 times more volatile than Hong Kong Land. It trades about 0.05 of its potential returns per unit of risk. Hong Kong Land is currently generating about 0.08 per unit of risk. If you would invest 45,033 in Zurich Insurance Group on September 3, 2024 and sell it today you would earn a total of 10,637 from holding Zurich Insurance Group or generate 23.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Zurich Insurance Group vs. Hong Kong Land
Performance |
| Timeline |
| Zurich Insurance |
| Hong Kong Land |
Zurich Insurance and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Hong Kong
The main advantage of trading using opposite Zurich Insurance and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| Zurich Insurance vs. CNH Industrial NV | Zurich Insurance vs. Silvercorp Metals | Zurich Insurance vs. GoldMining | Zurich Insurance vs. CAP LEASE AVIATION |
| Hong Kong vs. Neometals | Hong Kong vs. McEwen Mining | Hong Kong vs. CompuGroup Medical AG | Hong Kong vs. Wheaton Precious Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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