Correlation Between Zurich Insurance and Equifax
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Equifax 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 Equifax 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 Equifax, you can compare the effects of market volatilities on Zurich Insurance and Equifax 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 Equifax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Equifax.
Diversification Opportunities for Zurich Insurance and Equifax
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zurich and Equifax is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax 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 Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Equifax go up and down completely randomly.
Pair Corralation between Zurich Insurance and Equifax
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.97 times more return on investment than Equifax. However, Zurich Insurance Group is 1.03 times less risky than Equifax. It trades about 0.3 of its potential returns per unit of risk. Equifax is currently generating about 0.03 per unit of risk. If you would invest 2,660 in Zurich Insurance Group on September 1, 2024 and sell it today you would earn a total of 360.00 from holding Zurich Insurance Group or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Equifax
Performance |
| Timeline |
| Zurich Insurance |
| Equifax |
Zurich Insurance and Equifax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Equifax
The main advantage of trading using opposite Zurich Insurance and Equifax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Equifax 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 Equifax will offset losses from the drop in Equifax's long position.| Zurich Insurance vs. Ribbon Communications | Zurich Insurance vs. Rogers Communications | Zurich Insurance vs. Cogent Communications Holdings | Zurich Insurance vs. Autohome ADR |
| Equifax vs. HOCHSCHILD MINING | Equifax vs. HANOVER INSURANCE | Equifax vs. Zurich Insurance Group | Equifax vs. TSOGO SUN GAMING |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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