Correlation Between ZURICH INSURANCE and PT Bank
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and PT Bank 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 PT Bank 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 PT Bank Maybank, you can compare the effects of market volatilities on ZURICH INSURANCE and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and PT Bank.
Diversification Opportunities for ZURICH INSURANCE and PT Bank
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ZURICH and BOZA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and PT Bank Maybank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Maybank 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Maybank has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and PT Bank go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and PT Bank
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.26 times more return on investment than PT Bank. However, ZURICH INSURANCE GROUP is 3.87 times less risky than PT Bank. It trades about 0.1 of its potential returns per unit of risk. PT Bank Maybank is currently generating about 0.02 per unit of risk. If you would invest 2,172 in ZURICH INSURANCE GROUP on September 14, 2024 and sell it today you would earn a total of 728.00 from holding ZURICH INSURANCE GROUP or generate 33.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. PT Bank Maybank
Performance |
| Timeline |
| ZURICH INSURANCE |
| PT Bank Maybank |
ZURICH INSURANCE and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and PT Bank
The main advantage of trading using opposite ZURICH INSURANCE and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc | ZURICH INSURANCE vs. Apple Inc |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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