Correlation Between Zurich Insurance and Western Copper
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on Zurich Insurance and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Western Copper.
Diversification Opportunities for Zurich Insurance and Western Copper
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zurich and Western is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Western Copper go up and down completely randomly.
Pair Corralation between Zurich Insurance and Western Copper
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.56 times more return on investment than Western Copper. However, Zurich Insurance Group is 1.79 times less risky than Western Copper. It trades about 0.01 of its potential returns per unit of risk. Western Copper and is currently generating about -0.06 per unit of risk. If you would invest 2,900 in Zurich Insurance Group on November 8, 2024 and sell it today you would earn a total of 0.00 from holding Zurich Insurance Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Western Copper and
Performance |
| Timeline |
| Zurich Insurance |
| Western Copper |
Zurich Insurance and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Western Copper
The main advantage of trading using opposite Zurich Insurance and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Zurich Insurance vs. MUTUIONLINE | Zurich Insurance vs. Salesforce | Zurich Insurance vs. Wyndham Hotels Resorts | Zurich Insurance vs. Xenia Hotels Resorts |
| Western Copper vs. Chunghwa Telecom Co | Western Copper vs. China Communications Services | Western Copper vs. FIREWEED METALS P | Western Copper vs. PRECISION DRILLING P |
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 CEOs Directory module to screen CEOs from public companies around the world.
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