Correlation Between X FAB and ZURICH INSURANCE
Can any of the company-specific risk be diversified away by investing in both X FAB 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 X FAB and ZURICH INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on X FAB 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 X FAB with a short position of ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and ZURICH INSURANCE.
Diversification Opportunities for X FAB and ZURICH INSURANCE
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between XFB and ZURICH is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH INSURANCE and X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and ZURICH INSURANCE go up and down completely randomly.
Pair Corralation between X FAB and ZURICH INSURANCE
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 2.42 times more return on investment than ZURICH INSURANCE. However, X FAB is 2.42 times more volatile than ZURICH INSURANCE GROUP. It trades about 0.02 of its potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about -0.09 per unit of risk. If you would invest 496.00 in X FAB Silicon Foundries on October 18, 2024 and sell it today you would earn a total of 2.00 from holding X FAB Silicon Foundries or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. ZURICH INSURANCE GROUP
Performance |
| Timeline |
| X FAB Silicon |
| ZURICH INSURANCE |
X FAB and ZURICH INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and ZURICH INSURANCE
The main advantage of trading using opposite X FAB and ZURICH INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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.| X FAB vs. Gaztransport Technigaz SA | X FAB vs. SCIENCE IN SPORT | X FAB vs. Air Transport Services | X FAB vs. Fukuyama Transporting Co |
| ZURICH INSURANCE vs. INDOFOOD AGRI RES | ZURICH INSURANCE vs. Canadian Utilities Limited | ZURICH INSURANCE vs. Sunny Optical Technology | ZURICH INSURANCE vs. X FAB Silicon Foundries |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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