Correlation Between LION ONE and ZURICH INSURANCE
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and ZURICH INSURANCE.
Diversification Opportunities for LION ONE and ZURICH INSURANCE
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between LION and ZURICH is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and LION ONE 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 LION ONE METALS 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 LION ONE i.e., LION ONE and ZURICH INSURANCE go up and down completely randomly.
Pair Corralation between LION ONE and ZURICH INSURANCE
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the ZURICH INSURANCE. In addition to that, LION ONE is 3.03 times more volatile than ZURICH INSURANCE GROUP. It trades about -0.05 of its total potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about 0.37 per unit of volatility. If you would invest 2,700 in ZURICH INSURANCE GROUP on September 3, 2024 and sell it today you would earn a total of 240.00 from holding ZURICH INSURANCE GROUP or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. ZURICH INSURANCE GROUP
Performance |
| Timeline |
| LION ONE METALS |
| ZURICH INSURANCE |
LION ONE and ZURICH INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and ZURICH INSURANCE
The main advantage of trading using opposite LION ONE and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.| LION ONE vs. HomeToGo SE | LION ONE vs. NORTHEAST UTILITIES | LION ONE vs. SBM OFFSHORE | LION ONE vs. Zijin Mining Group |
| ZURICH INSURANCE vs. Siamgas And Petrochemicals | ZURICH INSURANCE vs. VULCAN MATERIALS | ZURICH INSURANCE vs. Compagnie Plastic Omnium | ZURICH INSURANCE vs. Soken Chemical Engineering |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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