Correlation Between JD HEALTH and ZURICH INSURANCE
Can any of the company-specific risk be diversified away by investing in both JD HEALTH and ZURICH INSURANCE 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 JD HEALTH and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD HEALTH INTL and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on JD HEALTH and ZURICH INSURANCE 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 JD HEALTH with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD HEALTH and ZURICH INSURANCE.
Diversification Opportunities for JD HEALTH and ZURICH INSURANCE
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 8ZN and ZURICH is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding JD HEALTH INTL and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and JD HEALTH 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 JD HEALTH INTL are associated (or correlated) with ZURICH INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZURICH INSURANCE has no effect on the direction of JD HEALTH i.e., JD HEALTH and ZURICH INSURANCE go up and down completely randomly.
Pair Corralation between JD HEALTH and ZURICH INSURANCE
Assuming the 90 days horizon JD HEALTH INTL is expected to under-perform the ZURICH INSURANCE. In addition to that, JD HEALTH is 3.14 times more volatile than ZURICH INSURANCE GROUP. It trades about -0.02 of its total potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about 0.1 per unit of volatility. If you would invest 2,022 in ZURICH INSURANCE GROUP on September 12, 2024 and sell it today you would earn a total of 918.00 from holding ZURICH INSURANCE GROUP or generate 45.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD HEALTH INTL vs. ZURICH INSURANCE GROUP
Performance |
| Timeline |
| JD HEALTH INTL |
| ZURICH INSURANCE |
JD HEALTH and ZURICH INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD HEALTH and ZURICH INSURANCE
The main advantage of trading using opposite JD HEALTH and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD HEALTH position performs unexpectedly, ZURICH INSURANCE 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 ZURICH INSURANCE will offset losses from the drop in ZURICH INSURANCE's long position.| JD HEALTH vs. United Utilities Group | JD HEALTH vs. FARO Technologies | JD HEALTH vs. Uber Technologies | JD HEALTH vs. Playtech plc |
| ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc |
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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