Correlation Between Zurich Insurance and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Charter Communications 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 Charter Communications 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 Charter Communications, you can compare the effects of market volatilities on Zurich Insurance and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Charter Communications.
Diversification Opportunities for Zurich Insurance and Charter Communications
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zurich and Charter is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Charter Communications go up and down completely randomly.
Pair Corralation between Zurich Insurance and Charter Communications
Assuming the 90 days trading horizon Zurich Insurance is expected to generate 1.47 times less return on investment than Charter Communications. But when comparing it to its historical volatility, Zurich Insurance Group is 1.45 times less risky than Charter Communications. It trades about 0.1 of its potential returns per unit of risk. Charter Communications is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 31,355 in Charter Communications on September 3, 2024 and sell it today you would earn a total of 5,720 from holding Charter Communications or generate 18.24% 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. Charter Communications
Performance |
| Timeline |
| Zurich Insurance |
| Charter Communications |
Zurich Insurance and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Charter Communications
The main advantage of trading using opposite Zurich Insurance and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Superior Plus Corp | Zurich Insurance vs. NMI Holdings |
| Charter Communications vs. Playa Hotels Resorts | Charter Communications vs. NH HOTEL GROUP | Charter Communications vs. RYU Apparel | Charter Communications vs. Pebblebrook Hotel Trust |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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