Correlation Between CAP LEASE and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both CAP LEASE 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 CAP LEASE and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Zurich Insurance Group, you can compare the effects of market volatilities on CAP LEASE 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 CAP LEASE with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Zurich Insurance.
Diversification Opportunities for CAP LEASE and Zurich Insurance
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAP and Zurich is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and Zurich Insurance go up and down completely randomly.
Pair Corralation between CAP LEASE and Zurich Insurance
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Zurich Insurance. In addition to that, CAP LEASE is 3.33 times more volatile than Zurich Insurance Group. It trades about -0.03 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.05 per unit of volatility. If you would invest 45,112 in Zurich Insurance Group on September 4, 2024 and sell it today you would earn a total of 10,558 from holding Zurich Insurance Group or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.54% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Zurich Insurance Group
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Zurich Insurance |
CAP LEASE and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Zurich Insurance
The main advantage of trading using opposite CAP LEASE and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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.| CAP LEASE vs. Associated British Foods | CAP LEASE vs. Tyson Foods Cl | CAP LEASE vs. Roebuck Food Group | CAP LEASE vs. Various Eateries PLC |
| Zurich Insurance vs. Blackstone Loan Financing | Zurich Insurance vs. Fresenius Medical Care | Zurich Insurance vs. CAP LEASE AVIATION | Zurich Insurance vs. Deltex Medical Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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