Correlation Between Zurich Insurance and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Kaiser Aluminum 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 Kaiser Aluminum 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 Kaiser Aluminum, you can compare the effects of market volatilities on Zurich Insurance and Kaiser Aluminum 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 Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Kaiser Aluminum.
Diversification Opportunities for Zurich Insurance and Kaiser Aluminum
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zurich and Kaiser is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Zurich Insurance and Kaiser Aluminum
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.69 times more return on investment than Kaiser Aluminum. However, Zurich Insurance Group is 1.45 times less risky than Kaiser Aluminum. It trades about 0.07 of its potential returns per unit of risk. Kaiser Aluminum is currently generating about -0.03 per unit of risk. If you would invest 2,470 in Zurich Insurance Group on September 27, 2024 and sell it today you would earn a total of 430.00 from holding Zurich Insurance Group or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Kaiser Aluminum
Performance |
| Timeline |
| Zurich Insurance |
| Kaiser Aluminum |
Zurich Insurance and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Kaiser Aluminum
The main advantage of trading using opposite Zurich Insurance and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. American International Group | Zurich Insurance vs. Assicurazioni Generali SpA | Zurich Insurance vs. Arch Capital Group |
| Kaiser Aluminum vs. ARDAGH METAL PACDL 0001 | Kaiser Aluminum vs. JD SPORTS FASH | Kaiser Aluminum vs. InPlay Oil Corp | Kaiser Aluminum vs. DISTRICT METALS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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