Correlation Between ZURICH INSURANCE and CeoTronics
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and CeoTronics 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 CeoTronics 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 CeoTronics AG, you can compare the effects of market volatilities on ZURICH INSURANCE and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and CeoTronics.
Diversification Opportunities for ZURICH INSURANCE and CeoTronics
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZURICH and CeoTronics is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and CeoTronics go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and CeoTronics
Assuming the 90 days trading horizon ZURICH INSURANCE is expected to generate 9.07 times less return on investment than CeoTronics. But when comparing it to its historical volatility, ZURICH INSURANCE GROUP is 1.33 times less risky than CeoTronics. It trades about 0.03 of its potential returns per unit of risk. CeoTronics AG is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 590.00 in CeoTronics AG on November 5, 2024 and sell it today you would earn a total of 45.00 from holding CeoTronics AG or generate 7.63% 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. CeoTronics AG
Performance |
| Timeline |
| ZURICH INSURANCE |
| CeoTronics AG |
ZURICH INSURANCE and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and CeoTronics
The main advantage of trading using opposite ZURICH INSURANCE and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| ZURICH INSURANCE vs. GigaMedia | ZURICH INSURANCE vs. Penn National Gaming | ZURICH INSURANCE vs. Apollo Medical Holdings | ZURICH INSURANCE vs. CONTAGIOUS GAMING INC |
| CeoTronics vs. SILICON LABORATOR | CeoTronics vs. China BlueChemical | CeoTronics vs. WisdomTree Investments | CeoTronics vs. CHEMICAL INDUSTRIES |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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