Correlation Between Golden Metal and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Golden Metal 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 Golden Metal and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Metal Resources and Zurich Insurance Group, you can compare the effects of market volatilities on Golden Metal 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 Golden Metal with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Zurich Insurance.
Diversification Opportunities for Golden Metal and Zurich Insurance
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Golden and Zurich is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Golden Metal 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 Golden Metal Resources 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 Golden Metal i.e., Golden Metal and Zurich Insurance go up and down completely randomly.
Pair Corralation between Golden Metal and Zurich Insurance
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 3.12 times more return on investment than Zurich Insurance. However, Golden Metal is 3.12 times more volatile than Zurich Insurance Group. It trades about 0.17 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about -0.15 per unit of risk. If you would invest 2,950 in Golden Metal Resources on October 14, 2024 and sell it today you would earn a total of 200.00 from holding Golden Metal Resources or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Metal Resources vs. Zurich Insurance Group
Performance |
| Timeline |
| Golden Metal Resources |
| Zurich Insurance |
Golden Metal and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Zurich Insurance
The main advantage of trading using opposite Golden Metal and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal 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.| Golden Metal vs. Europa Metals | Golden Metal vs. GreenX Metals | Golden Metal vs. Thor Mining PLC | Golden Metal vs. McEwen Mining |
| Zurich Insurance vs. Lundin Mining Corp | Zurich Insurance vs. European Metals Holdings | Zurich Insurance vs. First Class Metals | Zurich Insurance vs. Golden Metal Resources |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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