Correlation Between Zurich Insurance and Ping An
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Ping An 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 Ping An 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 Ping An Insurance, you can compare the effects of market volatilities on Zurich Insurance and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Ping An.
Diversification Opportunities for Zurich Insurance and Ping An
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zurich and Ping is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Ping An go up and down completely randomly.
Pair Corralation between Zurich Insurance and Ping An
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 1.63 times more return on investment than Ping An. However, Zurich Insurance is 1.63 times more volatile than Ping An Insurance. It trades about 0.2 of its potential returns per unit of risk. Ping An Insurance is currently generating about 0.19 per unit of risk. If you would invest 2,780 in Zurich Insurance Group on November 27, 2024 and sell it today you would earn a total of 340.00 from holding Zurich Insurance Group or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zurich Insurance Group vs. Ping An Insurance
Performance |
| Timeline |
| Zurich Insurance |
| Ping An Insurance |
Zurich Insurance and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Ping An
The main advantage of trading using opposite Zurich Insurance and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. American International Group | Zurich Insurance vs. Assicurazioni Generali SpA | Zurich Insurance vs. Sun Life Financial |
| Ping An vs. MidCap Financial Investment | Ping An vs. BOS BETTER ONLINE | Ping An vs. CODERE ONLINE LUX | Ping An vs. PACIFIC ONLINE |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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