Correlation Between BW LPG and ZURICH INSURANCE
Can any of the company-specific risk be diversified away by investing in both BW LPG 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 BW LPG and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BW LPG Limited and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on BW LPG 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 BW LPG with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BW LPG and ZURICH INSURANCE.
Diversification Opportunities for BW LPG and ZURICH INSURANCE
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BW9 and ZURICH is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BW LPG Limited and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and BW LPG 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 BW LPG Limited 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 BW LPG i.e., BW LPG and ZURICH INSURANCE go up and down completely randomly.
Pair Corralation between BW LPG and ZURICH INSURANCE
Assuming the 90 days horizon BW LPG Limited is expected to under-perform the ZURICH INSURANCE. In addition to that, BW LPG is 2.92 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 0.32 per unit of volatility. If you would invest 2,720 in ZURICH INSURANCE GROUP on September 1, 2024 and sell it today you would earn a total of 220.00 from holding ZURICH INSURANCE GROUP or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BW LPG Limited vs. ZURICH INSURANCE GROUP
Performance |
| Timeline |
| BW LPG Limited |
| ZURICH INSURANCE |
BW LPG and ZURICH INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BW LPG and ZURICH INSURANCE
The main advantage of trading using opposite BW LPG and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BW LPG 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.| BW LPG vs. Singapore Telecommunications Limited | BW LPG vs. Internet Thailand PCL | BW LPG vs. KRISPY KREME DL 01 | BW LPG vs. REGAL ASIAN INVESTMENTS |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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