Correlation Between Fast Retailing and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Fast Retailing 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 Fast Retailing and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Retailing Co and Zurich Insurance Group, you can compare the effects of market volatilities on Fast Retailing 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 Fast Retailing with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Retailing and Zurich Insurance.
Diversification Opportunities for Fast Retailing and Zurich Insurance
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fast and Zurich is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fast Retailing Co and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Fast Retailing 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 Fast Retailing Co 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 Fast Retailing i.e., Fast Retailing and Zurich Insurance go up and down completely randomly.
Pair Corralation between Fast Retailing and Zurich Insurance
Assuming the 90 days trading horizon Fast Retailing Co is expected to under-perform the Zurich Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Fast Retailing Co is 1.09 times less risky than Zurich Insurance. The stock trades about -0.14 of its potential returns per unit of risk. The Zurich Insurance Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,900 in Zurich Insurance Group on November 8, 2024 and sell it today you would earn a total of 0.00 from holding Zurich Insurance Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fast Retailing Co vs. Zurich Insurance Group
Performance |
| Timeline |
| Fast Retailing |
| Zurich Insurance |
Fast Retailing and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Retailing and Zurich Insurance
The main advantage of trading using opposite Fast Retailing and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Retailing 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.| Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc |
| Zurich Insurance vs. MUTUIONLINE | Zurich Insurance vs. Salesforce | Zurich Insurance vs. Wyndham Hotels Resorts | Zurich Insurance vs. Xenia Hotels Resorts |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |