Correlation Between ZURICH INSURANCE and BW LPG
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and BW LPG 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 BW LPG 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 BW LPG Limited, you can compare the effects of market volatilities on ZURICH INSURANCE and BW LPG 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 BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and BW LPG.
Diversification Opportunities for ZURICH INSURANCE and BW LPG
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ZURICH and BW9 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited 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 BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and BW LPG go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and BW LPG
Assuming the 90 days trading horizon ZURICH INSURANCE is expected to generate 1.3 times less return on investment than BW LPG. But when comparing it to its historical volatility, ZURICH INSURANCE GROUP is 2.38 times less risky than BW LPG. It trades about 0.25 of its potential returns per unit of risk. BW LPG Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,110 in BW LPG Limited on November 27, 2024 and sell it today you would earn a total of 97.00 from holding BW LPG Limited or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. BW LPG Limited
Performance |
| Timeline |
| ZURICH INSURANCE |
| BW LPG Limited |
ZURICH INSURANCE and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and BW LPG
The main advantage of trading using opposite ZURICH INSURANCE and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| ZURICH INSURANCE vs. Vishay Intertechnology | ZURICH INSURANCE vs. Hastings Technology Metals | ZURICH INSURANCE vs. Uber Technologies | ZURICH INSURANCE vs. PKSHA TECHNOLOGY 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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