Correlation Between Zurich Insurance and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and Thai Beverage 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 Thai Beverage 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 Thai Beverage Public, you can compare the effects of market volatilities on Zurich Insurance and Thai Beverage 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 Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and Thai Beverage.
Diversification Opportunities for Zurich Insurance and Thai Beverage
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zurich and Thai is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public 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 Thai Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Beverage Public has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and Thai Beverage go up and down completely randomly.
Pair Corralation between Zurich Insurance and Thai Beverage
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.77 times more return on investment than Thai Beverage. However, Zurich Insurance Group is 1.3 times less risky than Thai Beverage. It trades about 0.06 of its potential returns per unit of risk. Thai Beverage Public is currently generating about 0.01 per unit of risk. If you would invest 2,780 in Zurich Insurance Group on August 28, 2024 and sell it today you would earn a total of 120.00 from holding Zurich Insurance Group or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. Thai Beverage Public
Performance |
| Timeline |
| Zurich Insurance |
| Thai Beverage Public |
Zurich Insurance and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and Thai Beverage
The main advantage of trading using opposite Zurich Insurance and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, Thai Beverage 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 Thai Beverage will offset losses from the drop in Thai Beverage's long position.| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Superior Plus Corp | Zurich Insurance vs. NMI Holdings | Zurich Insurance vs. Origin Agritech |
| Thai Beverage vs. Superior Plus Corp | Thai Beverage vs. Origin Agritech | Thai Beverage vs. Identiv | Thai Beverage vs. INTUITIVE SURGICAL |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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