Correlation Between Zurich Insurance and Qantas Airways
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Qantas Airways 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 Qantas Airways 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 Qantas Airways Limited, you can compare the effects of market volatilities on Zurich Insurance and Qantas Airways 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 Qantas Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Qantas Airways.
Diversification Opportunities for Zurich Insurance and Qantas Airways
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zurich and Qantas is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Qantas Airways Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qantas Airways 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 Qantas Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qantas Airways has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Qantas Airways go up and down completely randomly.
Pair Corralation between Zurich Insurance and Qantas Airways
Assuming the 90 days trading horizon Zurich Insurance is expected to generate 1.01 times less return on investment than Qantas Airways. But when comparing it to its historical volatility, Zurich Insurance Group is 1.17 times less risky than Qantas Airways. It trades about 0.06 of its potential returns per unit of risk. Qantas Airways Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 409.00 in Qantas Airways Limited on October 12, 2024 and sell it today you would earn a total of 161.00 from holding Qantas Airways Limited or generate 39.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Qantas Airways Limited
Performance |
| Timeline |
| Zurich Insurance |
| Qantas Airways |
Zurich Insurance and Qantas Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Qantas Airways
The main advantage of trading using opposite Zurich Insurance and Qantas Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Qantas Airways 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 Qantas Airways will offset losses from the drop in Qantas Airways' long position.| Zurich Insurance vs. Motorcar Parts of | Zurich Insurance vs. BioNTech SE | Zurich Insurance vs. PKSHA TECHNOLOGY INC | Zurich Insurance vs. Playtech plc |
| Qantas Airways vs. Japan Post Insurance | Qantas Airways vs. Zurich Insurance Group | Qantas Airways vs. COSTCO WHOLESALE CDR | Qantas Airways vs. RETAIL FOOD 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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