Correlation Between Popular and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Popular 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 Popular and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Popular and Zurich Insurance Group, you can compare the effects of market volatilities on Popular 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 Popular with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Popular and Zurich Insurance.
Diversification Opportunities for Popular and Zurich Insurance
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Popular and Zurich is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Popular and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and Popular 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 Popular 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 Popular i.e., Popular and Zurich Insurance go up and down completely randomly.
Pair Corralation between Popular and Zurich Insurance
Assuming the 90 days trading horizon Popular is expected to generate 1.21 times more return on investment than Zurich Insurance. However, Popular is 1.21 times more volatile than Zurich Insurance Group. It trades about 0.06 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.05 per unit of risk. If you would invest 5,692 in Popular on September 14, 2024 and sell it today you would earn a total of 3,608 from holding Popular or generate 63.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Popular vs. Zurich Insurance Group
Performance |
| Timeline |
| Popular |
| Zurich Insurance |
Popular and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Popular and Zurich Insurance
The main advantage of trading using opposite Popular and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Popular 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.| Popular vs. LIFENET INSURANCE CO | Popular vs. Selective Insurance Group | Popular vs. Universal Insurance Holdings | Popular vs. Ping An Insurance |
| Zurich Insurance vs. Superior Plus Corp | Zurich Insurance vs. SIVERS SEMICONDUCTORS AB | Zurich Insurance vs. CHINA HUARONG ENERHD 50 | Zurich Insurance vs. NORDIC HALIBUT AS |
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 .
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |