Correlation Between Mercantile Investment and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment 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 Mercantile Investment and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mercantile Investment and Zurich Insurance Group, you can compare the effects of market volatilities on Mercantile Investment 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 Mercantile Investment with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and Zurich Insurance.
Diversification Opportunities for Mercantile Investment and Zurich Insurance
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mercantile and Zurich is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Mercantile Investment 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 The Mercantile Investment 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 Mercantile Investment i.e., Mercantile Investment and Zurich Insurance go up and down completely randomly.
Pair Corralation between Mercantile Investment and Zurich Insurance
Assuming the 90 days trading horizon Mercantile Investment is expected to generate 45.64 times less return on investment than Zurich Insurance. In addition to that, Mercantile Investment is 1.33 times more volatile than Zurich Insurance Group. It trades about 0.01 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.32 per unit of volatility. If you would invest 52,020 in Zurich Insurance Group on August 30, 2024 and sell it today you would earn a total of 3,130 from holding Zurich Insurance Group or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Mercantile Investment vs. Zurich Insurance Group
Performance |
| Timeline |
| The Mercantile Investment |
| Zurich Insurance |
Mercantile Investment and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and Zurich Insurance
The main advantage of trading using opposite Mercantile Investment and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment 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.| Mercantile Investment vs. Anglesey Mining | Mercantile Investment vs. AMG Advanced Metallurgical | Mercantile Investment vs. Coeur Mining | Mercantile Investment vs. Capital Drilling |
| Zurich Insurance vs. Neometals | Zurich Insurance vs. Coor Service Management | Zurich Insurance vs. Fidelity Sustainable USD | Zurich Insurance vs. Sancus Lending Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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