Correlation Between ZURICH INSURANCE and KOOL2PLAY
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and KOOL2PLAY 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 KOOL2PLAY 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 KOOL2PLAY SA ZY, you can compare the effects of market volatilities on ZURICH INSURANCE and KOOL2PLAY 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 KOOL2PLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and KOOL2PLAY.
Diversification Opportunities for ZURICH INSURANCE and KOOL2PLAY
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ZURICH and KOOL2PLAY is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and KOOL2PLAY SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOOL2PLAY SA ZY 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 KOOL2PLAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOOL2PLAY SA ZY has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and KOOL2PLAY go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and KOOL2PLAY
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.18 times more return on investment than KOOL2PLAY. However, ZURICH INSURANCE GROUP is 5.67 times less risky than KOOL2PLAY. It trades about 0.23 of its potential returns per unit of risk. KOOL2PLAY SA ZY is currently generating about 0.03 per unit of risk. If you would invest 2,760 in ZURICH INSURANCE GROUP on August 29, 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 Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. KOOL2PLAY SA ZY
Performance |
| Timeline |
| ZURICH INSURANCE |
| KOOL2PLAY SA ZY |
ZURICH INSURANCE and KOOL2PLAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and KOOL2PLAY
The main advantage of trading using opposite ZURICH INSURANCE and KOOL2PLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, KOOL2PLAY 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 KOOL2PLAY will offset losses from the drop in KOOL2PLAY's long position.| ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Superior Plus Corp | ZURICH INSURANCE vs. SIVERS SEMICONDUCTORS AB |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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