Correlation Between Zurich Insurance and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and ULTRA CLEAN 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 ULTRA CLEAN 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 ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Zurich Insurance and ULTRA CLEAN 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 ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and ULTRA CLEAN.
Diversification Opportunities for Zurich Insurance and ULTRA CLEAN
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zurich and ULTRA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and ULTRA CLEAN HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA CLEAN HLDGS 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 ULTRA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA CLEAN HLDGS has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Zurich Insurance and ULTRA CLEAN
Assuming the 90 days trading horizon Zurich Insurance is expected to generate 1.04 times less return on investment than ULTRA CLEAN. But when comparing it to its historical volatility, Zurich Insurance Group is 1.26 times less risky than ULTRA CLEAN. It trades about 0.3 of its potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,180 in ULTRA CLEAN HLDGS on September 2, 2024 and sell it today you would earn a total of 440.00 from holding ULTRA CLEAN HLDGS or generate 13.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Zurich Insurance |
| ULTRA CLEAN HLDGS |
Zurich Insurance and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and ULTRA CLEAN
The main advantage of trading using opposite Zurich Insurance and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, ULTRA CLEAN 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 ULTRA CLEAN will offset losses from the drop in ULTRA CLEAN's long position.| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Sun Life Financial | Zurich Insurance vs. Arch Capital Group |
| ULTRA CLEAN vs. Ping An Insurance | ULTRA CLEAN vs. COSTCO WHOLESALE CDR | ULTRA CLEAN vs. Zurich Insurance Group | ULTRA CLEAN vs. BURLINGTON STORES |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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