Correlation Between ZURICH INSURANCE and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and ASSA ABLOY 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 ASSA ABLOY 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 ASSA ABLOY AB, you can compare the effects of market volatilities on ZURICH INSURANCE and ASSA ABLOY 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 ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and ASSA ABLOY.
Diversification Opportunities for ZURICH INSURANCE and ASSA ABLOY
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZURICH and ASSA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB 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 ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and ASSA ABLOY go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and ASSA ABLOY
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.88 times more return on investment than ASSA ABLOY. However, ZURICH INSURANCE GROUP is 1.14 times less risky than ASSA ABLOY. It trades about 0.17 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.08 per unit of risk. If you would invest 2,800 in ZURICH INSURANCE GROUP on November 1, 2024 and sell it today you would earn a total of 120.00 from holding ZURICH INSURANCE GROUP or generate 4.29% 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. ASSA ABLOY AB
Performance |
| Timeline |
| ZURICH INSURANCE |
| ASSA ABLOY AB |
ZURICH INSURANCE and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and ASSA ABLOY
The main advantage of trading using opposite ZURICH INSURANCE and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, ASSA ABLOY 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 ASSA ABLOY will offset losses from the drop in ASSA ABLOY's long position.| ZURICH INSURANCE vs. Easy Software AG | ZURICH INSURANCE vs. Melco Resorts Entertainment | ZURICH INSURANCE vs. ATRESMEDIA | ZURICH INSURANCE vs. RCS MediaGroup SpA |
| ASSA ABLOY vs. Singapore Reinsurance | ASSA ABLOY vs. ZURICH INSURANCE GROUP | ASSA ABLOY vs. QBE Insurance Group | ASSA ABLOY vs. UNIQA INSURANCE GR |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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