Correlation Between ZURICH INSURANCE and ASML Holding
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and ASML Holding 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 ASML Holding 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 ASML Holding NV, you can compare the effects of market volatilities on ZURICH INSURANCE and ASML Holding 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 ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and ASML Holding.
Diversification Opportunities for ZURICH INSURANCE and ASML Holding
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ZURICH and ASML is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV 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 ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and ASML Holding go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and ASML Holding
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.5 times more return on investment than ASML Holding. However, ZURICH INSURANCE GROUP is 1.98 times less risky than ASML Holding. It trades about 0.07 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.02 per unit of risk. If you would invest 2,009 in ZURICH INSURANCE GROUP on August 28, 2024 and sell it today you would earn a total of 911.00 from holding ZURICH INSURANCE GROUP or generate 45.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. ASML Holding NV
Performance |
| Timeline |
| ZURICH INSURANCE |
| ASML Holding NV |
ZURICH INSURANCE and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and ASML Holding
The main advantage of trading using opposite ZURICH INSURANCE and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, ASML Holding 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 ASML Holding will offset losses from the drop in ASML Holding's long position.| ZURICH INSURANCE vs. The Boston Beer | ZURICH INSURANCE vs. Media and Games | ZURICH INSURANCE vs. United Breweries Co | ZURICH INSURANCE vs. Molson Coors Beverage |
| ASML Holding vs. ASML HOLDING NY | ASML Holding vs. Applied Materials | ASML Holding vs. Superior Plus Corp | ASML Holding vs. NMI Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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