Correlation Between Zurich Insurance and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on Zurich Insurance and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and GEELY AUTOMOBILE.
Diversification Opportunities for Zurich Insurance and GEELY AUTOMOBILE
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zurich and GEELY is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between Zurich Insurance and GEELY AUTOMOBILE
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 1.35 times more return on investment than GEELY AUTOMOBILE. However, Zurich Insurance is 1.35 times more volatile than GEELY AUTOMOBILE. It trades about 0.04 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.04 per unit of risk. If you would invest 2,940 in Zurich Insurance Group on November 7, 2024 and sell it today you would earn a total of 40.00 from holding Zurich Insurance Group or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Zurich Insurance Group vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| Zurich Insurance |
| GEELY AUTOMOBILE |
Zurich Insurance and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and GEELY AUTOMOBILE
The main advantage of trading using opposite Zurich Insurance and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| Zurich Insurance vs. SPARTAN STORES | Zurich Insurance vs. FIREWEED METALS P | Zurich Insurance vs. SOLSTAD OFFSHORE NK | Zurich Insurance vs. COSTCO WHOLESALE CDR |
| GEELY AUTOMOBILE vs. Automatic Data Processing | GEELY AUTOMOBILE vs. Northern Data AG | GEELY AUTOMOBILE vs. Firan Technology Group | GEELY AUTOMOBILE vs. Addtech AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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