Correlation Between ZURICH INSURANCE and Keyence
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and Keyence 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 Keyence 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 Keyence, you can compare the effects of market volatilities on ZURICH INSURANCE and Keyence 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 Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and Keyence.
Diversification Opportunities for ZURICH INSURANCE and Keyence
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between ZURICH and Keyence is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence 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 Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and Keyence go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and Keyence
Assuming the 90 days trading horizon ZURICH INSURANCE is expected to generate 3.99 times less return on investment than Keyence. But when comparing it to its historical volatility, ZURICH INSURANCE GROUP is 4.74 times less risky than Keyence. It trades about 0.1 of its potential returns per unit of risk. Keyence is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 16,317 in Keyence on September 14, 2024 and sell it today you would earn a total of 24,383 from holding Keyence or generate 149.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. Keyence
Performance |
| Timeline |
| ZURICH INSURANCE |
| Keyence |
ZURICH INSURANCE and Keyence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and Keyence
The main advantage of trading using opposite ZURICH INSURANCE and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, Keyence 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 Keyence will offset losses from the drop in Keyence'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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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