Correlation Between ZURICH INSURANCE and Gemfields Group
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and Gemfields Group 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 Gemfields Group 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 Gemfields Group Limited, you can compare the effects of market volatilities on ZURICH INSURANCE and Gemfields Group 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 Gemfields Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and Gemfields Group.
Diversification Opportunities for ZURICH INSURANCE and Gemfields Group
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ZURICH and Gemfields is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and Gemfields Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group 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 Gemfields Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and Gemfields Group go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and Gemfields Group
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to under-perform the Gemfields Group. But the stock apears to be less risky and, when comparing its historical volatility, ZURICH INSURANCE GROUP is 7.13 times less risky than Gemfields Group. The stock trades about -0.21 of its potential returns per unit of risk. The Gemfields Group Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8.20 in Gemfields Group Limited on October 16, 2024 and sell it today you would lose (0.50) from holding Gemfields Group Limited or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. Gemfields Group Limited
Performance |
| Timeline |
| ZURICH INSURANCE |
| Gemfields Group |
ZURICH INSURANCE and Gemfields Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and Gemfields Group
The main advantage of trading using opposite ZURICH INSURANCE and Gemfields Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, Gemfields Group 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 Gemfields Group will offset losses from the drop in Gemfields Group's long position.| ZURICH INSURANCE vs. Nok Airlines PCL | ZURICH INSURANCE vs. American Airlines Group | ZURICH INSURANCE vs. HEALTHSTREAM | ZURICH INSURANCE vs. International Consolidated Airlines |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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