Correlation Between ZURICH INSURANCE and ARMADA HOFFLER
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and ARMADA HOFFLER 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 ARMADA HOFFLER 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 ARMADA HOFFLER PR, you can compare the effects of market volatilities on ZURICH INSURANCE and ARMADA HOFFLER 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 ARMADA HOFFLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and ARMADA HOFFLER.
Diversification Opportunities for ZURICH INSURANCE and ARMADA HOFFLER
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZURICH and ARMADA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and ARMADA HOFFLER PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARMADA HOFFLER PR 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 ARMADA HOFFLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARMADA HOFFLER PR has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and ARMADA HOFFLER go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and ARMADA HOFFLER
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 1.02 times more return on investment than ARMADA HOFFLER. However, ZURICH INSURANCE is 1.02 times more volatile than ARMADA HOFFLER PR. It trades about 0.27 of its potential returns per unit of risk. ARMADA HOFFLER PR is currently generating about 0.05 per unit of risk. If you would invest 2,760 in ZURICH INSURANCE GROUP on September 16, 2024 and sell it today you would earn a total of 160.00 from holding ZURICH INSURANCE GROUP or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. ARMADA HOFFLER PR
Performance |
| Timeline |
| ZURICH INSURANCE |
| ARMADA HOFFLER PR |
ZURICH INSURANCE and ARMADA HOFFLER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and ARMADA HOFFLER
The main advantage of trading using opposite ZURICH INSURANCE and ARMADA HOFFLER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, ARMADA HOFFLER 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 ARMADA HOFFLER will offset losses from the drop in ARMADA HOFFLER's long position.| ZURICH INSURANCE vs. Carsales | ZURICH INSURANCE vs. Hitachi Construction Machinery | ZURICH INSURANCE vs. QURATE RETAIL INC | ZURICH INSURANCE vs. Salesforce |
| ARMADA HOFFLER vs. ZURICH INSURANCE GROUP | ARMADA HOFFLER vs. Goosehead Insurance | ARMADA HOFFLER vs. Ping An Insurance | ARMADA HOFFLER vs. Safety Insurance Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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