Correlation Between Zurich Insurance and E3 LITHIUM
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and E3 LITHIUM 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 E3 LITHIUM 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 E3 LITHIUM LTD, you can compare the effects of market volatilities on Zurich Insurance and E3 LITHIUM 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 E3 LITHIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and E3 LITHIUM.
Diversification Opportunities for Zurich Insurance and E3 LITHIUM
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Zurich and OW3 is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and E3 LITHIUM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E3 LITHIUM 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 E3 LITHIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E3 LITHIUM LTD has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and E3 LITHIUM go up and down completely randomly.
Pair Corralation between Zurich Insurance and E3 LITHIUM
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.33 times more return on investment than E3 LITHIUM. However, Zurich Insurance Group is 3.02 times less risky than E3 LITHIUM. It trades about 0.06 of its potential returns per unit of risk. E3 LITHIUM LTD is currently generating about 0.0 per unit of risk. If you would invest 1,959 in Zurich Insurance Group on October 11, 2024 and sell it today you would earn a total of 981.00 from holding Zurich Insurance Group or generate 50.08% 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. E3 LITHIUM LTD
Performance |
| Timeline |
| Zurich Insurance |
| E3 LITHIUM LTD |
Zurich Insurance and E3 LITHIUM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and E3 LITHIUM
The main advantage of trading using opposite Zurich Insurance and E3 LITHIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, E3 LITHIUM 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 E3 LITHIUM will offset losses from the drop in E3 LITHIUM's long position.| Zurich Insurance vs. Sun Life Financial | Zurich Insurance vs. Superior Plus Corp | Zurich Insurance vs. NMI Holdings | Zurich Insurance vs. SIVERS SEMICONDUCTORS AB |
| E3 LITHIUM vs. WESANA HEALTH HOLD | E3 LITHIUM vs. Zurich Insurance Group | E3 LITHIUM vs. MPH Health Care | E3 LITHIUM vs. Insurance Australia Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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