Correlation Between Zurich Insurance and COMMERCIAL VEHICLE
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE, you can compare the effects of market volatilities on Zurich Insurance and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and COMMERCIAL VEHICLE.
Diversification Opportunities for Zurich Insurance and COMMERCIAL VEHICLE
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zurich and COMMERCIAL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and COMMERCIAL VEHICLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL VEHICLE has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and COMMERCIAL VEHICLE go up and down completely randomly.
Pair Corralation between Zurich Insurance and COMMERCIAL VEHICLE
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.96 times more return on investment than COMMERCIAL VEHICLE. However, Zurich Insurance Group is 1.05 times less risky than COMMERCIAL VEHICLE. It trades about -0.02 of its potential returns per unit of risk. COMMERCIAL VEHICLE is currently generating about -0.65 per unit of risk. If you would invest 2,988 in Zurich Insurance Group on January 18, 2025 and sell it today you would lose (88.00) from holding Zurich Insurance Group or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. COMMERCIAL VEHICLE
Performance |
| Timeline |
| Zurich Insurance |
| COMMERCIAL VEHICLE |
Zurich Insurance and COMMERCIAL VEHICLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and COMMERCIAL VEHICLE
The main advantage of trading using opposite Zurich Insurance and COMMERCIAL VEHICLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE will offset losses from the drop in COMMERCIAL VEHICLE's long position.| Zurich Insurance vs. Forgame Holdings | Zurich Insurance vs. AIR PRODCHEMICALS | Zurich Insurance vs. MOVIE GAMES SA | Zurich Insurance vs. INTERSHOP Communications Aktiengesellschaft |
| COMMERCIAL VEHICLE vs. COFCO Joycome Foods | COMMERCIAL VEHICLE vs. Rocket Internet SE | COMMERCIAL VEHICLE vs. Geely Automobile Holdings | COMMERCIAL VEHICLE vs. Cars Inc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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