Correlation Between ZURICH INSURANCE and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both ZURICH INSURANCE and Occidental Petroleum 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 Occidental Petroleum 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 Occidental Petroleum, you can compare the effects of market volatilities on ZURICH INSURANCE and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZURICH INSURANCE and Occidental Petroleum.
Diversification Opportunities for ZURICH INSURANCE and Occidental Petroleum
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ZURICH and Occidental is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ZURICH INSURANCE GROUP and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of ZURICH INSURANCE i.e., ZURICH INSURANCE and Occidental Petroleum go up and down completely randomly.
Pair Corralation between ZURICH INSURANCE and Occidental Petroleum
Assuming the 90 days trading horizon ZURICH INSURANCE GROUP is expected to generate 0.77 times more return on investment than Occidental Petroleum. However, ZURICH INSURANCE GROUP is 1.31 times less risky than Occidental Petroleum. It trades about 0.1 of its potential returns per unit of risk. Occidental Petroleum is currently generating about -0.03 per unit of risk. If you would invest 2,323 in ZURICH INSURANCE GROUP on December 2, 2024 and sell it today you would earn a total of 797.00 from holding ZURICH INSURANCE GROUP or generate 34.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZURICH INSURANCE GROUP vs. Occidental Petroleum
Performance |
| Timeline |
| ZURICH INSURANCE |
| Occidental Petroleum |
ZURICH INSURANCE and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZURICH INSURANCE and Occidental Petroleum
The main advantage of trading using opposite ZURICH INSURANCE and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZURICH INSURANCE position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| ZURICH INSURANCE vs. BAKED GAMES SA | ZURICH INSURANCE vs. GigaMedia | ZURICH INSURANCE vs. Agricultural Bank of | ZURICH INSURANCE vs. ALEFARM BREWING DK 05 |
| Occidental Petroleum vs. BG Foods | Occidental Petroleum vs. US Foods Holding | Occidental Petroleum vs. PLANT VEDA FOODS | Occidental Petroleum vs. Ares Management Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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