Correlation Between SAFETY MEDICAL and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both SAFETY MEDICAL 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 SAFETY MEDICAL and Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAFETY MEDICAL PROD and Zurich Insurance Group, you can compare the effects of market volatilities on SAFETY MEDICAL 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 SAFETY MEDICAL with a short position of Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFETY MEDICAL and Zurich Insurance.
Diversification Opportunities for SAFETY MEDICAL and Zurich Insurance
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAFETY and Zurich is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SAFETY MEDICAL PROD and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance and SAFETY MEDICAL 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 SAFETY MEDICAL PROD 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 SAFETY MEDICAL i.e., SAFETY MEDICAL and Zurich Insurance go up and down completely randomly.
Pair Corralation between SAFETY MEDICAL and Zurich Insurance
Assuming the 90 days trading horizon SAFETY MEDICAL PROD is expected to under-perform the Zurich Insurance. In addition to that, SAFETY MEDICAL is 2.11 times more volatile than Zurich Insurance Group. It trades about -0.02 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.06 per unit of volatility. If you would invest 1,986 in Zurich Insurance Group on September 12, 2024 and sell it today you would earn a total of 974.00 from holding Zurich Insurance Group or generate 49.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAFETY MEDICAL PROD vs. Zurich Insurance Group
Performance |
| Timeline |
| SAFETY MEDICAL PROD |
| Zurich Insurance |
SAFETY MEDICAL and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAFETY MEDICAL and Zurich Insurance
The main advantage of trading using opposite SAFETY MEDICAL and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFETY MEDICAL 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.| SAFETY MEDICAL vs. Apple Inc | SAFETY MEDICAL vs. Apple Inc | SAFETY MEDICAL vs. Apple Inc | SAFETY MEDICAL vs. Apple Inc |
| Zurich Insurance vs. Corsair Gaming | Zurich Insurance vs. MeVis Medical Solutions | Zurich Insurance vs. Air New Zealand | Zurich Insurance vs. SAFETY MEDICAL PROD |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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