Correlation Between Zurich Insurance and General Mills
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and General Mills 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 General Mills 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 General Mills, you can compare the effects of market volatilities on Zurich Insurance and General Mills 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 General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and General Mills.
Diversification Opportunities for Zurich Insurance and General Mills
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zurich and General is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills 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 General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and General Mills go up and down completely randomly.
Pair Corralation between Zurich Insurance and General Mills
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 1.08 times more return on investment than General Mills. However, Zurich Insurance is 1.08 times more volatile than General Mills. It trades about 0.06 of its potential returns per unit of risk. General Mills is currently generating about -0.02 per unit of risk. If you would invest 1,986 in Zurich Insurance Group on September 12, 2024 and sell it today you would earn a total of 974.00 from holding Zurich Insurance Group or generate 49.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. General Mills
Performance |
| Timeline |
| Zurich Insurance |
| General Mills |
Zurich Insurance and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and General Mills
The main advantage of trading using opposite Zurich Insurance and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' long position.| Zurich Insurance vs. Corsair Gaming | Zurich Insurance vs. MeVis Medical Solutions | Zurich Insurance vs. Air New Zealand | Zurich Insurance vs. SAFETY MEDICAL PROD |
| General Mills vs. Hormel Foods | General Mills vs. Superior Plus Corp | General Mills vs. SIVERS SEMICONDUCTORS AB | General Mills vs. NorAm Drilling AS |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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