Correlation Between VELA TECHNOLPLC and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both VELA TECHNOLPLC 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 VELA TECHNOLPLC and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VELA TECHNOLPLC LS 0001 and Zurich Insurance Group, you can compare the effects of market volatilities on VELA TECHNOLPLC 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 VELA TECHNOLPLC with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of VELA TECHNOLPLC and Zurich Insurance.
Diversification Opportunities for VELA TECHNOLPLC and Zurich Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VELA and Zurich is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VELA TECHNOLPLC LS 0001 and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and VELA TECHNOLPLC 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 VELA TECHNOLPLC LS 0001 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 VELA TECHNOLPLC i.e., VELA TECHNOLPLC and Zurich Insurance go up and down completely randomly.
Pair Corralation between VELA TECHNOLPLC and Zurich Insurance
Assuming the 90 days trading horizon VELA TECHNOLPLC LS 0001 is expected to generate 10.65 times more return on investment than Zurich Insurance. However, VELA TECHNOLPLC is 10.65 times more volatile than Zurich Insurance Group. It trades about 0.04 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.07 per unit of risk. If you would invest 0.01 in VELA TECHNOLPLC LS 0001 on December 12, 2024 and sell it today you would earn a total of 0.04 from holding VELA TECHNOLPLC LS 0001 or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
VELA TECHNOLPLC LS 0001 vs. Zurich Insurance Group
Performance |
| Timeline |
| VELA TECHNOLPLC LS |
| Zurich Insurance |
VELA TECHNOLPLC and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VELA TECHNOLPLC and Zurich Insurance
The main advantage of trading using opposite VELA TECHNOLPLC and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VELA TECHNOLPLC 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.| VELA TECHNOLPLC vs. MEDCAW INVESTMENTS LS 01 | ||
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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