Correlation Between Caledonia Mining and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Caledonia Mining 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 Caledonia Mining and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Mining and Zurich Insurance Group, you can compare the effects of market volatilities on Caledonia Mining 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 Caledonia Mining with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Mining and Zurich Insurance.
Diversification Opportunities for Caledonia Mining and Zurich Insurance
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Caledonia and Zurich is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Mining and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Caledonia Mining 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 Caledonia Mining 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 Caledonia Mining i.e., Caledonia Mining and Zurich Insurance go up and down completely randomly.
Pair Corralation between Caledonia Mining and Zurich Insurance
Assuming the 90 days trading horizon Caledonia Mining is expected to generate 1.54 times less return on investment than Zurich Insurance. In addition to that, Caledonia Mining is 2.36 times more volatile than Zurich Insurance Group. It trades about 0.01 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 45,120 in Zurich Insurance Group on August 28, 2024 and sell it today you would earn a total of 10,080 from holding Zurich Insurance Group or generate 22.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Caledonia Mining vs. Zurich Insurance Group
Performance |
| Timeline |
| Caledonia Mining |
| Zurich Insurance |
Caledonia Mining and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Mining and Zurich Insurance
The main advantage of trading using opposite Caledonia Mining and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Mining 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.| Caledonia Mining vs. Givaudan SA | Caledonia Mining vs. Antofagasta PLC | Caledonia Mining vs. Centamin PLC | Caledonia Mining vs. Atalaya Mining |
| Zurich Insurance vs. Cizzle Biotechnology Holdings | Zurich Insurance vs. X FAB Silicon Foundries | Zurich Insurance vs. Allianz Technology Trust | Zurich Insurance vs. Alfa Financial Software |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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