Correlation Between EBRO FOODS and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both EBRO FOODS 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 EBRO FOODS and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBRO FOODS and Zurich Insurance Group, you can compare the effects of market volatilities on EBRO FOODS 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 EBRO FOODS with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and Zurich Insurance.
Diversification Opportunities for EBRO FOODS and Zurich Insurance
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EBRO and Zurich is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and EBRO FOODS 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 EBRO FOODS 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 EBRO FOODS i.e., EBRO FOODS and Zurich Insurance go up and down completely randomly.
Pair Corralation between EBRO FOODS and Zurich Insurance
Assuming the 90 days trading horizon EBRO FOODS is expected to generate 3.78 times less return on investment than Zurich Insurance. But when comparing it to its historical volatility, EBRO FOODS is 1.09 times less risky than Zurich Insurance. It trades about 0.02 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,994 in Zurich Insurance Group on October 16, 2024 and sell it today you would earn a total of 886.00 from holding Zurich Insurance Group or generate 44.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBRO FOODS vs. Zurich Insurance Group
Performance |
| Timeline |
| EBRO FOODS |
| Zurich Insurance |
EBRO FOODS and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBRO FOODS and Zurich Insurance
The main advantage of trading using opposite EBRO FOODS and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBRO FOODS 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.| EBRO FOODS vs. Synchrony Financial | EBRO FOODS vs. PNC Financial Services | EBRO FOODS vs. REVO INSURANCE SPA | EBRO FOODS vs. CVB Financial Corp |
| Zurich Insurance vs. United Natural Foods | Zurich Insurance vs. EBRO FOODS | Zurich Insurance vs. 24SEVENOFFICE GROUP AB | Zurich Insurance vs. SENECA FOODS A |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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