Correlation Between ZURICH INSURANCE and NEWELL RUBBERMAID
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and NEWELL RUBBERMAID 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 NEWELL RUBBERMAID 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 NEWELL RUBBERMAID , you can compare the effects of market volatilities on ZURICH INSURANCE and NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and NEWELL RUBBERMAID.
Diversification Opportunities for ZURICH INSURANCE and NEWELL RUBBERMAID
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZURICH and NEWELL is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID 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 NEWELL RUBBERMAID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL RUBBERMAID has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and NEWELL RUBBERMAID go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and NEWELL RUBBERMAID
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.48 times more return on investment than NEWELL RUBBERMAID. However, ZURICH INSURANCE GROUP is 2.08 times less risky than NEWELL RUBBERMAID. It trades about 0.25 of its potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about 0.07 per unit of risk. If you would invest 2,740 in ZURICH INSURANCE GROUP on August 30, 2024 and sell it today you would earn a total of 180.00 from holding ZURICH INSURANCE GROUP or generate 6.57% 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. NEWELL RUBBERMAID
Performance |
| Timeline |
| ZURICH INSURANCE |
| NEWELL RUBBERMAID |
ZURICH INSURANCE and NEWELL RUBBERMAID Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and NEWELL RUBBERMAID
The main advantage of trading using opposite ZURICH INSURANCE and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, NEWELL RUBBERMAID 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 NEWELL RUBBERMAID will offset losses from the drop in NEWELL RUBBERMAID's long position.| ZURICH INSURANCE vs. MUTUIONLINE | ZURICH INSURANCE vs. Ribbon Communications | ZURICH INSURANCE vs. Charter Communications | ZURICH INSURANCE vs. BOS BETTER ONLINE |
| NEWELL RUBBERMAID vs. PACIFIC ONLINE | NEWELL RUBBERMAID vs. Titan Machinery | NEWELL RUBBERMAID vs. Penta Ocean Construction Co | NEWELL RUBBERMAID vs. Salesforce |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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