Correlation Between Zurich Insurance and CHINA VANKE
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and CHINA VANKE 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 Zurich Insurance and CHINA VANKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zurich Insurance Group and CHINA VANKE TD, you can compare the effects of market volatilities on Zurich Insurance and CHINA VANKE 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 Zurich Insurance with a short position of CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and CHINA VANKE.
Diversification Opportunities for Zurich Insurance and CHINA VANKE
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and CHINA is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD and Zurich Insurance 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 Zurich Insurance Group are associated (or correlated) with CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and CHINA VANKE go up and down completely randomly.
Pair Corralation between Zurich Insurance and CHINA VANKE
Assuming the 90 days trading horizon Zurich Insurance is expected to generate 1.05 times less return on investment than CHINA VANKE. But when comparing it to its historical volatility, Zurich Insurance Group is 5.68 times less risky than CHINA VANKE. It trades about 0.06 of its potential returns per unit of risk. CHINA VANKE TD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 189.00 in CHINA VANKE TD on October 13, 2024 and sell it today you would lose (128.00) from holding CHINA VANKE TD or give up 67.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. CHINA VANKE TD
Performance |
| Timeline |
| Zurich Insurance |
| CHINA VANKE TD |
Zurich Insurance and CHINA VANKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and CHINA VANKE
The main advantage of trading using opposite Zurich Insurance and CHINA VANKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, CHINA VANKE 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 CHINA VANKE will offset losses from the drop in CHINA VANKE's long position.| Zurich Insurance vs. United Airlines Holdings | Zurich Insurance vs. Nok Airlines PCL | Zurich Insurance vs. PARKEN Sport Entertainment | Zurich Insurance vs. International Consolidated Airlines |
| CHINA VANKE vs. INSURANCE AUST GRP | CHINA VANKE vs. Goosehead Insurance | CHINA VANKE vs. HANOVER INSURANCE | CHINA VANKE vs. Zurich Insurance Group |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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