Correlation Between Singapore Reinsurance and ZURICH INSURANCE
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance 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 Singapore Reinsurance and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on Singapore Reinsurance 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 Singapore Reinsurance with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and ZURICH INSURANCE.
Diversification Opportunities for Singapore Reinsurance and ZURICH INSURANCE
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Singapore and ZURICH is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and Singapore Reinsurance 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 Singapore Reinsurance 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 Singapore Reinsurance i.e., Singapore Reinsurance and ZURICH INSURANCE go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and ZURICH INSURANCE
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 2.5 times more return on investment than ZURICH INSURANCE. However, Singapore Reinsurance is 2.5 times more volatile than ZURICH INSURANCE GROUP. It trades about 0.18 of its potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about 0.32 per unit of risk. If you would invest 3,140 in Singapore Reinsurance on September 1, 2024 and sell it today you would earn a total of 340.00 from holding Singapore Reinsurance or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. ZURICH INSURANCE GROUP
Performance |
| Timeline |
| Singapore Reinsurance |
| ZURICH INSURANCE |
Singapore Reinsurance and ZURICH INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and ZURICH INSURANCE
The main advantage of trading using opposite Singapore Reinsurance and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance 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.| Singapore Reinsurance vs. SIVERS SEMICONDUCTORS AB | Singapore Reinsurance vs. Darden Restaurants | Singapore Reinsurance vs. Reliance Steel Aluminum | Singapore Reinsurance vs. Q2M Managementberatung AG |
| ZURICH INSURANCE vs. SIVERS SEMICONDUCTORS AB | ZURICH INSURANCE vs. Darden Restaurants | ZURICH INSURANCE vs. Reliance Steel Aluminum | ZURICH INSURANCE vs. Q2M Managementberatung AG |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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