Correlation Between Zurich Insurance and Neometals
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Neometals 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 Neometals 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 Neometals, you can compare the effects of market volatilities on Zurich Insurance and Neometals 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 Neometals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Neometals.
Diversification Opportunities for Zurich Insurance and Neometals
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and Neometals is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Neometals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neometals 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 Neometals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neometals has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Neometals go up and down completely randomly.
Pair Corralation between Zurich Insurance and Neometals
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.25 times more return on investment than Neometals. However, Zurich Insurance Group is 3.98 times less risky than Neometals. It trades about 0.32 of its potential returns per unit of risk. Neometals is currently generating about -0.14 per unit of risk. If you would invest 51,860 in Zurich Insurance Group on September 13, 2024 and sell it today you would earn a total of 2,950 from holding Zurich Insurance Group or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Neometals
Performance |
| Timeline |
| Zurich Insurance |
| Neometals |
Zurich Insurance and Neometals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Neometals
The main advantage of trading using opposite Zurich Insurance and Neometals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Neometals 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 Neometals will offset losses from the drop in Neometals' long position.| Zurich Insurance vs. British American Tobacco | Zurich Insurance vs. Ecofin Global Utilities | Zurich Insurance vs. Verizon Communications | Zurich Insurance vs. Ally Financial |
| Neometals vs. Batm Advanced Communications | Neometals vs. Prosiebensat 1 Media | Neometals vs. Flutter Entertainment PLC | Neometals vs. Cellnex Telecom SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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