Correlation Between Hong Kong and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Hong Kong 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 Hong Kong and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Zurich Insurance Group, you can compare the effects of market volatilities on Hong Kong 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 Hong Kong with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Zurich Insurance.
Diversification Opportunities for Hong Kong and Zurich Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hong and Zurich is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Hong Kong 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 Hong Kong Land 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 Hong Kong i.e., Hong Kong and Zurich Insurance go up and down completely randomly.
Pair Corralation between Hong Kong and Zurich Insurance
Assuming the 90 days trading horizon Hong Kong is expected to generate 3.9 times less return on investment than Zurich Insurance. But when comparing it to its historical volatility, Hong Kong Land is 6.41 times less risky than Zurich Insurance. It trades about 0.08 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 45,033 in Zurich Insurance Group on September 3, 2024 and sell it today you would earn a total of 10,637 from holding Zurich Insurance Group or generate 23.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hong Kong Land vs. Zurich Insurance Group
Performance |
| Timeline |
| Hong Kong Land |
| Zurich Insurance |
Hong Kong and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Zurich Insurance
The main advantage of trading using opposite Hong Kong and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong 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.| Hong Kong vs. Neometals | Hong Kong vs. McEwen Mining | Hong Kong vs. CompuGroup Medical AG | Hong Kong vs. Wheaton Precious Metals |
| Zurich Insurance vs. CNH Industrial NV | Zurich Insurance vs. Silvercorp Metals | Zurich Insurance vs. GoldMining | Zurich Insurance vs. CAP LEASE AVIATION |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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