Correlation Between Zurich Insurance and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Zurich Insurance and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on Zurich Insurance and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurich Insurance and SENECA FOODS-A.
Diversification Opportunities for Zurich Insurance and SENECA FOODS-A
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zurich and SENECA is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Zurich Insurance Group and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Zurich Insurance i.e., Zurich Insurance and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Zurich Insurance and SENECA FOODS-A
Assuming the 90 days trading horizon Zurich Insurance Group is expected to generate 0.52 times more return on investment than SENECA FOODS-A. However, Zurich Insurance Group is 1.92 times less risky than SENECA FOODS-A. It trades about 0.06 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.02 per unit of risk. If you would invest 1,994 in Zurich Insurance Group on September 3, 2024 and sell it today you would earn a total of 1,026 from holding Zurich Insurance Group or generate 51.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurich Insurance Group vs. SENECA FOODS A
Performance |
| Timeline |
| Zurich Insurance |
| SENECA FOODS A |
Zurich Insurance and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurich Insurance and SENECA FOODS-A
The main advantage of trading using opposite Zurich Insurance and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurich Insurance position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Superior Plus Corp | Zurich Insurance vs. NMI Holdings |
| SENECA FOODS-A vs. TOTAL GABON | SENECA FOODS-A vs. Walgreens Boots Alliance | SENECA FOODS-A vs. Peak Resources Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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