Correlation Between Oakley Capital and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Oakley Capital 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 Oakley Capital and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakley Capital Investments and Zurich Insurance Group, you can compare the effects of market volatilities on Oakley Capital 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 Oakley Capital with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakley Capital and Zurich Insurance.
Diversification Opportunities for Oakley Capital and Zurich Insurance
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oakley and Zurich is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Oakley Capital Investments and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Oakley Capital 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 Oakley Capital Investments 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 Oakley Capital i.e., Oakley Capital and Zurich Insurance go up and down completely randomly.
Pair Corralation between Oakley Capital and Zurich Insurance
Assuming the 90 days trading horizon Oakley Capital Investments is expected to under-perform the Zurich Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Oakley Capital Investments is 1.27 times less risky than Zurich Insurance. The stock trades about -0.16 of its potential returns per unit of risk. The Zurich Insurance Group is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 52,036 in Zurich Insurance Group on August 28, 2024 and sell it today you would earn a total of 3,164 from holding Zurich Insurance Group or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakley Capital Investments vs. Zurich Insurance Group
Performance |
| Timeline |
| Oakley Capital Inves |
| Zurich Insurance |
Oakley Capital and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakley Capital and Zurich Insurance
The main advantage of trading using opposite Oakley Capital and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakley Capital 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.| Oakley Capital vs. Catalyst Media Group | Oakley Capital vs. Oncimmune Holdings plc | Oakley Capital vs. Invesco Health Care | Oakley Capital vs. Coor Service Management |
| Zurich Insurance vs. Cizzle Biotechnology Holdings | Zurich Insurance vs. X FAB Silicon Foundries | Zurich Insurance vs. Allianz Technology Trust | Zurich Insurance vs. Alfa Financial Software |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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