Correlation Between Zurich Insurance and KOKUYO
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and KOKUYO 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 KOKUYO 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 KOKUYO LTD, you can compare the effects of market volatilities on Zurich Insurance and KOKUYO 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 KOKUYO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and KOKUYO.
Diversification Opportunities for Zurich Insurance and KOKUYO
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zurich and KOKUYO is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and KOKUYO LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOKUYO LTD 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 KOKUYO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOKUYO LTD has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and KOKUYO go up and down completely randomly.
Pair Corralation between Zurich Insurance and KOKUYO
Assuming the 90 days trading horizon Zurich Insurance is expected to generate 1.55 times less return on investment than KOKUYO. But when comparing it to its historical volatility, Zurich Insurance Group is 1.13 times less risky than KOKUYO. It trades about 0.08 of its potential returns per unit of risk. KOKUYO LTD is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,460 in KOKUYO LTD on November 2, 2024 and sell it today you would earn a total of 200.00 from holding KOKUYO LTD or generate 13.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Zurich Insurance Group vs. KOKUYO LTD
Performance |
| Timeline |
| Zurich Insurance |
| KOKUYO LTD |
Zurich Insurance and KOKUYO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and KOKUYO
The main advantage of trading using opposite Zurich Insurance and KOKUYO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, KOKUYO 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 KOKUYO will offset losses from the drop in KOKUYO's long position.| Zurich Insurance vs. Eastman Chemical | Zurich Insurance vs. TIANDE CHEMICAL | Zurich Insurance vs. SILICON LABORATOR | Zurich Insurance vs. Adtalem Global Education |
| KOKUYO vs. Agilent Technologies | KOKUYO vs. CLOVER HEALTH INV | KOKUYO vs. CeoTronics AG | KOKUYO vs. ETFS Coffee ETC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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