Correlation Between Air Transport and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Zurich Insurance Group, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Zurich Insurance.
Diversification Opportunities for Air Transport and Zurich Insurance
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Zurich is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Air Transport 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 Air Transport Services 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 Air Transport i.e., Air Transport and Zurich Insurance go up and down completely randomly.
Pair Corralation between Air Transport and Zurich Insurance
Assuming the 90 days horizon Air Transport is expected to generate 1.89 times less return on investment than Zurich Insurance. In addition to that, Air Transport is 1.7 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 0.07 per unit of volatility. If you would invest 1,844 in Zurich Insurance Group on December 12, 2024 and sell it today you would earn a total of 1,216 from holding Zurich Insurance Group or generate 65.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Zurich Insurance Group
Performance |
| Timeline |
| Air Transport Services |
| Zurich Insurance |
Air Transport and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Zurich Insurance
The main advantage of trading using opposite Air Transport and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.| Air Transport vs. APPLIED MATERIALS | ||
| Air Transport vs. VULCAN MATERIALS | ||
| Air Transport vs. Mitsui Chemicals | ||
| Air Transport vs. Plastic Omnium |
| Zurich Insurance vs. DATADOT TECHNOLOGY | ||
| Zurich Insurance vs. INDOFOOD AGRI RES | ||
| Zurich Insurance vs. CN DATANG C | ||
| Zurich Insurance vs. Datang International Power |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |