Correlation Between ZURICH INSURANCE and MSCI
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and MSCI 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 MSCI 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 MSCI Inc, you can compare the effects of market volatilities on ZURICH INSURANCE and MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and MSCI.
Diversification Opportunities for ZURICH INSURANCE and MSCI
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ZURICH and MSCI is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and MSCI go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and MSCI
Assuming the 90 days trading horizon ZURICH INSURANCE is expected to generate 1.61 times less return on investment than MSCI. But when comparing it to its historical volatility, ZURICH INSURANCE GROUP is 1.29 times less risky than MSCI. It trades about 0.13 of its potential returns per unit of risk. MSCI Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 44,782 in MSCI Inc on September 12, 2024 and sell it today you would earn a total of 14,938 from holding MSCI Inc or generate 33.36% 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. MSCI Inc
Performance |
| Timeline |
| ZURICH INSURANCE |
| MSCI Inc |
ZURICH INSURANCE and MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and MSCI
The main advantage of trading using opposite ZURICH INSURANCE and MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, MSCI 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 MSCI will offset losses from the drop in MSCI's long position.| ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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