Correlation Between ZURICH INSURANCE and MAGNUM MINING

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Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and MAGNUM MINING 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 MAGNUM MINING 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 MAGNUM MINING EXP, you can compare the effects of market volatilities on ZURICH INSURANCE and MAGNUM MINING 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 MAGNUM MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and MAGNUM MINING.

Diversification Opportunities for ZURICH INSURANCE and MAGNUM MINING

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between ZURICH and MAGNUM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and MAGNUM MINING EXP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNUM MINING EXP 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 MAGNUM MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNUM MINING EXP has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and MAGNUM MINING go up and down completely randomly.

Pair Corralation between ZURICH INSURANCE and MAGNUM MINING

If you would invest  2,172  in ZURICH INSURANCE GROUP on November 9, 2024 and sell it today you would earn a total of  768.00  from holding ZURICH INSURANCE GROUP or generate 35.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ZURICH INSURANCE GROUP  vs.  MAGNUM MINING EXP

 Performance 
       Timeline  
ZURICH INSURANCE 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ZURICH INSURANCE GROUP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ZURICH INSURANCE may actually be approaching a critical reversion point that can send shares even higher in March 2025.
MAGNUM MINING EXP 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days MAGNUM MINING EXP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MAGNUM MINING is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ZURICH INSURANCE and MAGNUM MINING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ZURICH INSURANCE and MAGNUM MINING

The main advantage of trading using opposite ZURICH INSURANCE and MAGNUM MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, MAGNUM MINING 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 MAGNUM MINING will offset losses from the drop in MAGNUM MINING's long position.
The idea behind ZURICH INSURANCE GROUP and MAGNUM MINING EXP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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