Correlation Between Zurich Insurance and Nisshinbo Holdings
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Nisshinbo Holdings 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 Nisshinbo Holdings 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 Nisshinbo Holdings, you can compare the effects of market volatilities on Zurich Insurance and Nisshinbo Holdings 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 Nisshinbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Nisshinbo Holdings.
Diversification Opportunities for Zurich Insurance and Nisshinbo Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zurich and Nisshinbo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Nisshinbo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshinbo Holdings 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 Nisshinbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshinbo Holdings has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Nisshinbo Holdings go up and down completely randomly.
Pair Corralation between Zurich Insurance and Nisshinbo Holdings
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.98 times more return on investment than Nisshinbo Holdings. However, Zurich Insurance Group is 1.02 times less risky than Nisshinbo Holdings. It trades about 0.06 of its potential returns per unit of risk. Nisshinbo Holdings is currently generating about -0.01 per unit of risk. If you would invest 1,941 in Zurich Insurance Group on October 13, 2024 and sell it today you would earn a total of 939.00 from holding Zurich Insurance Group or generate 48.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Zurich Insurance Group vs. Nisshinbo Holdings
Performance |
| Timeline |
| Zurich Insurance |
| Nisshinbo Holdings |
Zurich Insurance and Nisshinbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Nisshinbo Holdings
The main advantage of trading using opposite Zurich Insurance and Nisshinbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Nisshinbo Holdings 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 Nisshinbo Holdings will offset losses from the drop in Nisshinbo Holdings' long position.| Zurich Insurance vs. United Airlines Holdings | Zurich Insurance vs. Nok Airlines PCL | Zurich Insurance vs. PARKEN Sport Entertainment | Zurich Insurance vs. International Consolidated Airlines |
| Nisshinbo Holdings vs. Vienna Insurance Group | Nisshinbo Holdings vs. Zurich Insurance Group | Nisshinbo Holdings vs. REVO INSURANCE SPA | Nisshinbo Holdings vs. PENN Entertainment |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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