Correlation Between Zurich Insurance and UET United
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and UET United 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 UET United 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 UET United Electronic, you can compare the effects of market volatilities on Zurich Insurance and UET United 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 UET United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and UET United.
Diversification Opportunities for Zurich Insurance and UET United
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zurich and UET is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic 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 UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and UET United go up and down completely randomly.
Pair Corralation between Zurich Insurance and UET United
Assuming the 90 days trading horizon Zurich Insurance Group is expected to under-perform the UET United. But the stock apears to be less risky and, when comparing its historical volatility, Zurich Insurance Group is 3.62 times less risky than UET United. The stock trades about -0.03 of its potential returns per unit of risk. The UET United Electronic is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 88.00 in UET United Electronic on October 25, 2024 and sell it today you would earn a total of 7.00 from holding UET United Electronic or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. UET United Electronic
Performance |
| Timeline |
| Zurich Insurance |
| UET United Electronic |
Zurich Insurance and UET United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and UET United
The main advantage of trading using opposite Zurich Insurance and UET United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, UET United 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 UET United will offset losses from the drop in UET United's long position.| Zurich Insurance vs. American International Group | Zurich Insurance vs. Assicurazioni Generali SpA | Zurich Insurance vs. Sun Life Financial | Zurich Insurance vs. The Hartford Financial |
| UET United vs. MOLSON RS BEVERAGE | UET United vs. CARSALESCOM | UET United vs. INTER CARS SA | UET United vs. Commercial Vehicle 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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